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.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here