Friday, May 20, 2011

Retailers jump on Comet exit talk

16 May 2011 Last updated at 14:32 GMT Continue reading the main story Shares in UK electrical retailers have jumped amid rumours that the loss-making Comet chain may be sold off.

Comet's owner, Kesa, saw its share price rise 7% by mid-afternoon in London, while rival Dixons rose 10.6%.

Kesa - which also owns the the profitable French chain Darty - is under pressure from key shareholder Knight Vinke to get rid of Comet.

The sale may presage a closure of some of Comet's 250 stores, to the benefit of struggling rivals.

Comet - which contributes a third of Kesa's group revenues - saw sales fall 15% in the first four months of the year, compared with a 5.5% increase at Darty.

If the sale goes ahead, it is likely to go hand-in-hand with the delisting of Kesa from the London Stock Exchange, leaving the holding company with a listing in Paris.

UK electrical retailers continue to suffer from a sluggish recovery in consumer spending.

Dixons, which owns chains Currys and PC World, had to downgrade its profits forecasts in March because of weak sales.


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