Since the launch of my book “Sold Out” Who killed the High Street, I have entered the world of social media on Twitter and Facebook commenting on retail issues. As a consequence I have been asked to sit on a panel at an event at The Houses of Parliament and The Retail Week conference in March of next year. I have also been commenting in the national press and on both national and local radio.
Therefore, the first objective of the book has been achieved: I am well and truly involved in the debate about the future of retail in the UK. I now intend to complete a weekly blog which will concentrate on topical issues from the week and focus on one in particular. Hopefully this will help stimulate debate through the vanishinghighstreet.com web-site soliciting views on important subjects.
For this my first blog I will resist talking about the recent results from the big 4 and the growth that they are getting from the C store and on-line channels whilst their more efficient traditional store routes are declining and concentrate instead on the demise of Comet.
Having presided ,as Non Executive Chairman, over the failure of one national retailer; Focus DIY ltd, and witnessed first hand the cost to customers, suppliers and colleagues who lost their jobs I know the pain and heartache that falling into administration causes. In my book I talk about the private equity involvement in UK retailing over the last 20 years and the value they have extracted from the sector with their debt leverage model and little or no investment into the customer proposition. Although the demise of Comet was not caused by an exact replica of that model the key is that it did not have enough working capital to stay afloat.
In my opinion Darty got off lightly unloading the business and its liabilities to landlords, suppliers and staff for just £50m. OpCapita have, from what I can see, entered into a “heads I win, tails I win” deal placing the £50m dowry that they received in a company and then lending it to Comet as a super senior secured creditor. That means that the proceeds from the fire sale will go to OpCapita and other creditors ranking ahead or pari-pursu with them. The likely outcome is that OpCapita will get most if not all of the £50m for themselves and their investors. Darty have washed their hand of commitments for just £50m and the losers are the customers, suppliers and staff. Some will say this was good business by both Darty and OpCapita others will agree with me that this is morally wrong and the shape of this deal together with the involvement of both organisations should be investigated by Government.
What is your view?
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