A Crisis of consumer confidence is having a radical impact on electricals retail.
A major shake-up is taking place at Comet after it posted an £8.9m loss for its financial year. The firm will close 17 under-performing shops and is on the hunt for a buyer for its 230-strong chain of stores.
Meanwhile, Dixons Retail posted a £224m loss for the year. The results are down to the closure of its Spanish arm and writing down the value of its Greek business.
UK sales remained relatively robust, with revenue down three per cent year-on-year.
Reports in the press suggest US giant Best Buy could swoop for either chain. Retail analyst Nick Bubb of Arden Partners is “bemused” by the rumours as it goes against the firm’s new strategy.
Best Buy started opening stores in the UK last year, but is now re-evaluating plans on whether to continue with the expansion after posting a £62m loss for its
Electrical retailers are suffering from brutal economic conditions, which have seen plummeting sales of big ticket items such as TVs. The expected surge in sales of 3D TVs has yet to materialise. The situation has had an impact on Argos, too. The retailer reported a 20 per cent fall in home electronics sales for the first quarter.
The crisis may result in chains moving away from the High Street and into shopping centres.