Comet, which is owned by GAME’s saviour OpCapita, is likely to enter administration today.
The move endangers some 6,000 UK jobs across 240 stores at the UK’s second largest electrical retailer, with losses for the year ending April expected to hit £35m.
The decline has been expedited after trade insurers cut credit lines to suppliers – very similar to the problems GAME faced before OpCapita moved in to rescue the chain.
And once word spread that opCapita had received allegedly received offers for the business, suppliers began to toughen the trading agreements, exasperating the problems.
In The Guardian’s words: “OpCapita had promised to keep Comet going for 18 months and its rapid decline will attract scrutiny of its stewardship. In a previous guise the same firm, which is run by former investment banker Henry Jackson, took over the running of furniture chain MFI in 2006 after securing a £130m dowry from its owner. It was sold on two years later but fell into administration soon after the deal went through.”
Under OpCapita’s watch comet has cut its workforce by around 3,000 and closed stores.
OpCapita famously acquired Comet for just £2 around a year ago, with then owner Kesa effectively paying the owners £50m for the privilege.
In the run-up to OpCapita’s acquisition of GAME in April a source close to the firm told MCV that: “We are not asset strippers, we’ve never stripped anything. We’re about investing and improving. It’s a point of difference and we’re proud of it. We focus on running businesses. That’s what we’re about.”
The source told us at the time that “OpCapita has recently led Comet to its most successful month for two years in February”, also citing its success with French retailer BUT in 2008.
However, even back then analyst Nick Budd questioned OpCapita’s motivations for its acquisition of GAME, stating: “It is not so lucky, in that it has no valuable assets to sell and has little supplier support, and it is not obvious what OpCapital think they can bring to the party."
And in his first interview with MCV since the acquisition, new games boss Martyn Gibbs heaped praise on the firm.
“The first and most obvious benefit is that, thanks to OpCapita, two much loved brands were rescued, over 3,000 jobs were saved and 330 stores stayed open,” he told MCV. “OpCapita, led by Henry Jackson the managing partner there, was relentless in its belief of a future games retail model.
“In terms of working with them, I’ve been hugely impressed with their approach and their expertise. Our chairman, David Hamid, is a hugely experienced retailer and he and the OpCapita team have brought incredibly valuable experience, advice, acumen and standing.
“They’ve absolutely allowed the management team full control of the business and have supported everything we’ve wanted to implement to date. So the experience is there for us to tap into whenever we need to but the management team are very much running the business.”