TIME has finally run out for workers at a city electrical store after the collapse of national retailer Comet.
The firm’s last remaining stores – including the branch at North Hylton Riverside in Sunderland – shut up shop for the final time yesterday as the company became the recession’s latest high-profile casualty.
The closure of the final group of 49 stores from the former 235-strong estate came seven weeks after Deloitte was appointed administrator.
It follows the closure of the Durham store, at Pity Me, last week.
The collapse of the firm, founded in Hull in 1933 and which employed around 6,895 people at the time of its collapse, is one of the biggest high street failures since the demise of Woolworth’s in 2008.
Deloitte has so far failed to find a buyer for the company or any of its shops.
In a report published on Monday, the administrator said it remained in talks with a small number of parties including over the sale of Internet operations and the brand.
Staff will face a wait to get the money they are owed after the collapse of the firm.
With insufficient funds raised from the winding-down of the chain, it will fall to the Government’s Redundancy Payments Service to meet around £23.2million of outstanding redundancy pay, accrued holiday pay and pay in lieu of notice.
The administrator’s report highlights the scale of Comet’s collapse, with the chain racking up losses of £95million in the year to April, having seen revenues slump by £200million on a year earlier.
This was followed by a further £31million loss in the subsequent five months as credit insurers lost confidence in Comet’s long-term viability and withdrew support for the business.
The investment vehicle put together by Henry Jackson of OpCapita, who raised funding from unnamed investors for Comet’s takeover from French retail group Darty, is expected to get payments of just under £50million as a secured creditor, a shortfall of £95million on the amount owed.
But it has been reported that unsecured creditors include HM Revenue & Customs which is owed £26.1million and will receive nothing.
Comet was hit by a perfect storm of weak high street trading conditions, competition from cheaper on-line rivals and its own inability to secure the trade credit insurance needed to safeguard suppliers.
The company was hit particularly hard by the economic downturn’s effect on the housing market, and especially a fall in the number of first-time buyers who were key customers for Comet.