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Comet’s demise has certainly been a shock to the retail channel, but it shouldn’t have come as a surprise.
The retailer’s problems have been years in the making.
In the nineties, weak retail strategies saw the firm start to fall behind its competitors in the search for marketshare. The chain had heavy leasehold commitments that made it prone to severe rent hikes.
A merger with Norweb saw it close stores as early as 1996. It was hit hard by the recession and never truly climbed out of the hole it had fallen into.
It failed to compete with new online superstars, or to bring customers into stores through good service.
White goods in general saw a downturn as consumers stopped spending so much and when they did buy, preferred to do so based on price. Margins never got any better.
OpCapita was not the knight in white armour it once appeared to be, with rumours emerging that perhaps the investment firm did not try as hard as it could to turn Comet’s fortunes around.
Indeed, OpCapita will now profit from the exercise, only a year after buying Comet from KESA for £2.
We can all play the blame game, but the truth is it’s not as easy as finding one single culprit and pointing a finger at it. Comet’s failure is the culmination of years of small and big missteps.
Perhaps it’s simply a case of retail evolving – survival of the fittest. If Comet had somehow found a way to keep going, how much longer would it have limped on for?
There is still a market for selling physical goods in bricks and mortar stores, but firms have to be very good at it to succeed, and if they’re not beating competitors on price, they have to do so on excellent customer service and unique offerings.
Comet isn’t alone in struggling in these difficult times. Clinton Cards, Game Group, JJB Sports, La Senza, Past Times, and Peacocks have all had to close stores. Argos announced it would reduce store numbers only last month.
Pick any High Street at random and it probably has more empty units in it this year, than last year – the British Retail Consortium agrees.
Comet burned brightly for a while, but the signs that it would face serious problems have been written in the stars for a long time. Some just didn’t want to see them.
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