Kesa , Europe's No. 3 electricals retailer, swung to an expected first-half loss reflecting a poor performance at its Comet business in Britain, which is being sold, and weaker second-quarter trading in France.

Kesa, whose main business is French market leader Darty, said on Wednesday while all markets were becoming more challenging, it was well prepared for the peak season.

It made a retail loss of 9.2 million euros (7.8 million pounds) in the six months to October, in line with guidance issued last month for a loss of around 11 million and compared with a profit of 32.4 million in the 2010 period.

Revenue fell 7.9 percent to 2.57 billion euros, while gross margin improved 10 basis points, reflecting a strategy of driving sales of higher margin small domestic appliances and accessories.

Sales at stores open over a year were down 3.7 percent at Darty France and slumped 18.6 percent at Comet.

Last month Kesa agreed to sell the 248-store Comet business to private investment firm OpCapita for a nominal 2 pounds, with OpCapita receiving a 50 million pounds dowry. Shareholders will vote on the deal on December 15.

Kesa has guided that it expects the balance of revenue and profit will be significantly more weighted towards its second half than was the case in 2010/11.

It also said last month that unless market conditions improved, Darty France's retail 2011/12 profit would be below the prior year's 149 million euros.

After exceptional charges of 133.6 million euros, largely in respect of impairment of assets at Comet, Kesa made a first-half pretax loss of 148 million euros.

It maintained its interim dividend at 2.25 cents.

Shares in Kesa, which have lost half their value over the past year, closed Tuesday at 87 pence, valuing the business at 461 million pounds.

(Reporting by James Davey; Editing by Dan Lalor)