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Comet administration: Deloitte steps in

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2nd Nov 2012
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Electrical retailer Comet has confirmed it will be put into administration next week. 

Around 6,500 jobs are at risk in the 240-store business, which has appointed Deloitte as its administrator. 

Deloitte partner and head of UK restructuring services Neville Kahn will lead the administration. He also acted as joint administrator on Woolworths in 2010.

In an official statement, Comet said: "Comet Group Limited can confirm that it has today taken steps to seek the protection of the court with a view to the company entering into administration during week commencing 5 November.  In the meantime the board is urgently working with its advisers to seek a solution to secure a viable future for the company.” 

The retailer's collapse is one of the biggest since Woolworths in 2008, with other recent casualties of the current economic climate including JJB Sports, Clinton Cards and Game.

The news comes a few months after investment firm OpCapita bought Comet for just £2. It is thought OpCapita and former executive of rival Dickinsons and Comet chairman John Clare had been unable to secure trade credit insurance needed to safeguard suppliers.

Comet started sale talks with buyers in October after the business model changed. Suppliers could not fund insurers willing to cover goods delivered if the retailer defaulted on payment.

In the past fortnight, Comet has been under pressure from suppliers to pay upfront for stock before Christmas. 

Comet will be run as a going concern while it looks at its options for sales, closures and liquidation, including searching for a buyer for the business. 

Customers are being told that it is business "until further notice" and are saying it will fulfil product deliveries that have been ordered. 

The administration just before Christmas also raises the prospect of a rush for discounted products as the administrator attempts to raise cash for creditors.

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