The company said a notice of intent to file for administration had been handed in at the high court with the formal appointment of administrators expected early next week. The crunch puts 6,500 jobs at risk and raises the spectre of one of the darkest days for the high street since the collapse of Woolworths in 2008. In an email to staff, Comet chief executive Bob Darke said the board was "urgently working with its advisers to seek a solution to secure a viable future".
The 80-year-old company started as Comet Battery Stores, which charged batteries for wireless sets, and pioneered out-of-town retailing, opening its first superstore in Hull in 1968. In the first of a series of ownership changes, Comet was bought by B&Q owner Kingfisher in 1984 for £129m and, by the mid-1990s, had become a national chain. Amstrad founder Lord Sugar tweeted: "Sad to see the demise of Comet. They were my first serious trade customer when I started my first electronics factory in the early 70s."
Insolvency experts at Deloitte are on standby to take over 240 stores, which will trade as normal this weekend. No redundancies have been announced at the head office in Rickmansworth or support centres in Clevedon in Somerset and Hull. The chain said it would honour deliveries that have been paid for but shoppers were urged to spend any gift cards or vouchers as soon as possible - "whilst stocks last".
A shopper at a Comet store in north London said: "The others are just better." He wanted to buy speakers but found only one set on the shelves. A female shopper was also scathing: "Years ago I had problems with Comet's insurance. Now I prefer to buy at John Lewis, where they offer a longer guarantee."
The notice to appoint administrators gives companies five working days to discuss a sale or other survival plans. It can be extended to 10 working days but this does not usually prevent them going into administration. Comet's woes are expected to aid Dixons and Argos owner Home Retail, whose shares closed up 13.5% and 4.4%, as investors believe the rivals will pick up market share.
Comet, Britain's second-largest electrical specialist after Dixons, has struggled against supermarkets and online retailers such as Amazon and is estimated to have made a loss of £35m on sales of £1.3bn in the year to 30 April. After several years of declining results, its French parent Kesa cut the cord at the start of this year, paying turnaround firm OpCapita a £50m dowry to take on Comet for a token £2.
But without the protection of its large listed parent, which has since renamed Darty, Comet hobbled on as credit insurers refused to extend cover to suppliers. Without insurance, electrical suppliers sought payment upfront or asked for a legal claim, called "retention of title", so stock could be returned in the event of administration. On Thursday, suppliers were reported to have sent lorries to reclaim stock from Comet's distribution centre in Skelmersdale. Spartan stocks of so-called "brown goods" such as TVs showed that some big names had stopped supplying Comet. One said: "If you haven't got brown goods or a big range, you are always going to struggle, and some brands just didn't buy into the new arrangement."
Analysts did not expect a buyer for the entire business, meaning stores could be sold off to other retailers. OpCapita is thought to be the largest secured creditor, so will be repaid first from monies raised by the administration process.
Retail casualties of 2012
January Clothing chain Peacocks (the biggest retail failure since Woolworths went under three years earlier), children's clothing chain Pumpkin Patch, gift shop Past Times, lingerie chain La Senza, shoe shop chain Barratts.
March Computer game retailer Game.
April Upmarket clothing firm Aquascutum, Allied Carpets
May UK's biggest specialist cards retailer, Clinton Cards.
June Department store Allders.
July Discount retailer Ethel Austin, health food company Julian Graves.
October JJB Sports.
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