6,000 jobs are on the line as Comet calls in the administrators.
More than 6,000 British jobs hung in the balance today as administration loomed for the electrical retailer. The company said it was "urgently working" on restructuring with plans to go into administration next week. The announcement is set to cap off a grim year for Britain's high streets - the worst since the financial crisis began.
Industry commentators have blamed the beleaguered store's collapse on a perfect storm of price wars with other chains, expanding supermarkets and online vendors, coupled with a massive drop in consumer spending as the recession continues.
Electrical retailing has been one of the hardest hit by the growth in online shopping as consumers turn to options such as Amazon, the world's largest online retailer.
Last month saw Argos, one of the best-known names on the high street, announce plans to cut 50 shops and focus more investment in online retailing.
Official figures released in September showed consumer spending continued to flatline at 2004 levels when adjusted for inflation - meaning less money to go around on big-ticket items like high-cost electronics.
The prospect of Comet's administration is the latest blow for a brick and mortar retailer grappling with the increasing popularity of online shopping and UK consumers with less money to spend.
Founded in 1933, the chain now controls 240 stores across Britain - meaning as many as 6,500 jobs could go if administrators fail to find a buyer. Deloitte has been lined up as an administrator in what will be the 29th high street retailer to go into administration since the turn of the year.
JJB Sports announced in September its own lapse into administration, with around 2,200 jobs at stake. Rival Sports Direct signed a £23.8m deal to take on 20 JJB stores and 550 staff - but that was put on ice earlier this week after the Office of Fair Trading announced a probe into the plans.
Clinton Cards, Game and clothing retailers Peacocks and Aquascutum all passed into administration earlier this year, with nearly 10,000 British workers axed in the process.
Shopworkers' union USDAW described reports of the latest collapse as "disastrous."
General secretary John Hannett urged administrators to keep Comet's storefronts open until a buyer could be found, while staff were to contact their local union office as soon as possible.
"While every failure in the retail sector has its own specific causes, there can be no doubt that the continuing squeeze on people's incomes caused by the government's reckless austerity policies lies behind much of the sectors' current difficulties," he said.
Comet is run by Henry Jackson who is developing a bit of a reputation. The ex-banker and founder of OpCapita (who own Comet), is set to send yet another British business he owns into administration.
In 2006 Jackson made his debut acquisition for just £1 - British furniture retailer MFI. But within two years MFI had crashed with £145m of debts.
MFI’s previous owners had left Jackson with a “dowry” payment of £60.6m and left £51.9m of customer deposits. Nevertheless, Britain’s biggest furniture store saw part of its credit insurance withdrawn and, not long afterwards, Jackson off-loaded the company to management. Within months it was in administration.
According to public records, Jackson who lives and works in Chelsea, is a director of 14 businesses. But most do not have accounts or are junior to parent companies in Jersey, whose records are not available publicly.
Report from Ian Bell