Kingfisher thumped by consumer slowdown
“These are the toughest markets Kingfisher has faced in many years,particularly in the UK”. The company has said that 22 stores are to close.
Difficult trading conditions in the UK and France had a clear impact on the first half trading performance with retail sales up 1.8% (down 3.4% like-for-like (LFL)) and retail profit down 22.8%.’Higher ticket’ projects, such as kitchens, bathrooms and bedrooms were affected, reflecting both weaker spending and the significant downturn in housing transactions.
As a result, the UK Repair, Maintenance and Improvement market declined by 2 per cent in the first half. The French DIY market grew at its slowest rate for eight years. Total Kingfisher sales in France grew 4.7% (up 1.0% LFL)with retail profit down 2.2%.
In the Rest of Europe and Asia, Kingfisher’s sales grew by 15.2% (down 5.2% LFL)
with retail profit down 16.0%. A strong performance from Castorama Italy was offset by Castorama Poland, which faced tough comparatives in a market continuing to be affected by the introduction of higher VAT rates in 2004. B&Q will close 22 stores and around 16 of B&Q’s larger Warehouse stores will be converted to the new mini-Warehouse format, releasing space which will be marketed to other retailers. This will represent a reduction of around 7 per cent of total selling space.
