Deloitte, which was appointed yesterday, has launched an “urgent” search for a buyer to protect some of the 6,600 jobs at the 236-outlet chain.
But as a consequence, a Deloitte spokesman said: “Gift vouchers have been suspended temporarily while they assess the situation.”
However, all Comet stores will remain open and the group’s staff will continue to be paid in the meantime, according to Deloitte.
Angry customers took to Twitter to complain about not being able to use their Comet gift vouchers.
Our own Group Managing Director, Richard Alvin, who was issued vouchers for the store by insurers following a burglary at his home, described his experience in a Comet store on Saturday: “#comet experience went well this morning! No stock to buy, only selling contents of shop floor at normal price & won’t accept £600 voucher.”
The collapse of Comet marks one of the biggest high street casualties since the demise of Woolworths in 2008 and comes a month after the failure of JJB Sports.
Neville Kahn, joint administrator and restructuring services partner at Deloitte, said on appointment: “Our immediate priorities are to stabilise the business, fully assess its financial position, and begin an urgent process to seek a suitable buyer which would also preserve jobs.
“In the meantime, all stores will continue to trade and all employees will continue to be paid.
“We appreciate the co-operation and support from the management, staff, customers, landlords and suppliers at what is clearly a very difficult time.”
Deloitte said Comet had been hit by weak high street trading conditions, competition from online rivals and being unable to secure the trade credit insurance needed to safeguard suppliers.
“The inability to obtain supplier credit for the peak Christmas trading period means that the company had no realistic prospect of raising further capital to build up sufficient stock to allow it to continue trading,” added Deloitte.
In particular, it was knocked by the lack of first-time home buyers, which had been key customers for Comet.
Its administration comes just months after Comet was taken over by investment firm OpCapita, which bought the chain for a nominal £2 in February.
GA Europe, which handles liquidations, is believed to have been lined up to assist in the winddown of the stores, but Deloitte will first run a sale in a last-ditch attempt to flush out any buyers for the 243 stores.
Comet has suffered from the withdrawal of trade credit insurers, which offer protection to suppliers against the failure of a retailer. Trade credit has become even tighter since it emerged last week that OpCapita was considering selling Comet.
The company was sold in February by Kesa, which gave OpCapita a £50 million dowry as part of the deal. OpCapita undertook to run the business as a going concern for six months.
The £50 million, which took the form of an equity investment in the holding company that owns Comet, was part of a £120 million package that included £40 million of asset-backed financing and £30 million from OpCapita’s investors.
As we reported at the time, TV Dragon Peter Jones had tried to buy Comet in February, but was unsuccessful, and it is not thought he would table a bid to acquire the retailer this time around.
OpCapita, via its vehicle Hailey Acquisitions Limited, will be the largest secured creditor, which means that it will be at the top of the queue for repayment from any proceeds that arise from the administration process.
The company has struggled against internet competition and the impact of a resurgent Dixons Retail, the owner of Currys and PC World.
The spokesman said no other changes have been made since yesterday, which means that trade is continuing as normal for consumers with outstanding orders and that the group intends to fulfil deliveries of goods which have been paid for.
Extended warranties previously purchased remain unaffected by the administration and remain valid.
