Comet ponders stores closure
Retail giant Kingfisher is considering shutting down nearly a quarter of its Comet stores in a fresh attempt to remove excess capacity from the overcrowded electrical retail market.
Kingfisher, which owns Woolworths, Superdrug and B&Q, as well as Comet, has told City analysts that a review of the chain’s operations could include the closure of “20 to 50” of its 235 Comet stores.
It is understood the firm could axe smaller stores located at the edge of towns, many of which were opened in the early and mid-Eighties.
Kingfisher is in its closed period before announcing interim results in March, and says it cannot comment.
Morgan Stanley analyst Nick Bubb comments: “Half of Comet’s smaller stores are poorly located, and the company needs to restructure its store portfolio.”
But store rationalisation is not the only issue facing Comet’s new chairman Eddie Styring, Bubb explains. “Comet missed out on the PC and multimedia markets. Its product mix is another problem.”
Kingfisher is under growing City pressure to take radical action at Woolworths. In a note by top brokerage house Natwest Markets, analyst John Richards argues that the chain should be split in two.
The larger stores should be sold off to other high-street players such as Marks & Spencer, WH Smith and Tesco – for its Metro format, he says. The smaller shops could then be positioned as local convenience stores.
