Comet collapse would be biggest blow to retail since Woolworths

In the 1990s it stepped up its grip on the market by acquiring Norweb Retail, which grew its collection of stores to more than 250.

However, over the last ten years, Comet has slowly faltered.

In 2003 it was demerged from Kingfisher into a new company called Kesa Electricals, now know as Darty, and came under mounting pressure from internet rivals offering cheaper prices and quicker service.

Kesa announced last year that it was to offload the beleaguered retailer – which was burning a hole in its balance sheet – sparking fears about the future of Comet.

Private equity firm OpCapita agreed to buy Comet for just £2 – collecting a £50m dowry from Kesa in the process – and put in place retail veteran John Clare to try to turn around the retailer.

However, the question marks about Comet’s future never went away

The deal between Kesa and OpCapita took months to complete, credit insurers threatened to pull their support for Comet, and the UK fell back into a double-dip recession.

There have also been industry doubts about OpCapita’s chances of succeeding with Comet, given the 2008 collapse of MFI, a retailer formerly owned by the firm.

Over the summer, Clare, who used to run Dixons, appeared to have stabilised Comet sales, won the backing of credit insurance, and begun the lengthy progress of trimming costs and shutting loss-making stores.

However, as the retailer prepared to stock-up for Christmas, credit insurers – which protect suppliers against the risk of a retailer defaulting – pulled their support.

This has left Comet having to fork out cash upfront for products, sparking a cash crunch from which the famous electricals retailer may not recover.

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