In the year Comet achieved sales of £1,676 million, with like-for-likes rising by 8.8%, mainly due to “very strong demand for flat screen televisions and multimedia, particularly laptops”. Retail profit from its 248 stores climbed 20% to £46 million, helped by £3.5 million from the net lease premium on the closure of its Fosse Park store.

Comet continues to invest in its service offering, both in-store and after-sales, with much of the improvement in performance put down to “improving the skills and motivation of colleagues in store”. The new 'click and collect' Internet ordering system helped boost web sales by 18%, and online orders now account for 7.5% of all Comet's sales.

Mezzanine floors are also boosting sales. Seven such stores trading for over a year are showing a 50% uplift in sales, with no increase in rent, and as a result Comet is planning 40 more over the next four years, with ten due in 2007. Though stores must close for three months, and the capital cost averages £1.2 million, the eventual payback is 'quite rapid' – in fact around twenty four months.

Despite the increase in sales, stock levels have remained flat, and overall the group is confident of further improvements in its supply chain. Three years ago it recognised the importance of accelerating stock turn in a deflationary environment, and clearly that work is now bearing fruit. It is also speeding up supplier rebates; traditionally collected after the year-end, now the invoice is raised when target levels are hit. The extra cash generated from such initiatives has helped halve net debt.

The group is also changing its yearend from 31 January to 30 April (bringing it into line with main rivals – DSG). Closing the books so soon after the peak season must have been a nightmare, especially with budgets to be prepared before the key outcome was known. Shareholders will not be out of pocket, as three dividend payments are planned over the 15-month period.

Ninety per cent off

The picture is getting even fuzzier at Jessops, the digital photography retailer. For the third time this year the company has issued a profit warning. The City ran out of patience and marked the shares down 70% to 14.5p. So loyal shareholders who supported its flotation in October 2004 have lost 90% of their money.

Like-for-like sales have tumbled (down 5.2% in the last month, despite slashing prices and heavier promotional activity) and debts are mounting. The company admits it will need more working capital in the autumn in excess of its current banking facilities with HSBC. The bankers are said to be supportive, but investors fear it will be reluctant to pour in further cash unless there is a very robust recovery plan in place.

The interim dividend has been suspended, the chairman is moving on and the commercial director, not long recruited from Sainsbury's, is also on his way. Inevitably, a strategic review is underway addressing how to 'reconfigure the business', so expect shop closures and redundancies.

Contrast

In my last column, I reported Wigan-based Plumbs as the first casualty of 2007. There are now two more to add to the list. Watford Electronics, which operated the savastore website, collapsed with trade debts reported to be around £3.6 million. And Owen Owen the store chain with large electrical departments has also called in administrators.

In contrast, John Lewis continues to go from strength to strength – picking up numerous awards, increasing market share, building profits and paying partners a record 18% bonus. Much of the growth has been driven by its success with electrics. Last year it increased such sales by 23%; the first eight weeks of its new financial year (to March 31) have seen turnover on electrics rise by a further 9% (compared with 6.5% across all categories).

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