Kingfisher sells controlling stake in B&Q China
Kingfisher plc announced a binding agreement to sell a controlling 70% stake in its B&Q China business to Wumei Holdings Group for a total cash consideration of £140 million. This agreement followed Kingfisher's previous announcement of its plans to look for a strategic partner to help develop its B&Q business in China.
Kingfisher will account for its remaining 30% interest as an investment. Adjusted measures for 2015/16 and 2014/15 will exclude B&Q China's operating results.
Wumart operates some 650 supermarkets and 10 department stores, and owns brands such as Wumart, Jingbei Shopping Mall, and Merrymart. The deal, conditional on Chinese Ministry of Commerce approval, is expected to close during the first half of 2015.
Kingfisher entered China in 1999 and expanded rapidly to capitalise on a housing boom. But while the spending power of China’s middle class has surged in recent years, the DIY trend never took off in a nation where labour is cheap.
Kingfisher made retail losses of £4m in China in the 13 weeks to November 1 as sales declined 10.6 per cent to £97m. The struggling business, which currently comprises 39 stores and employs 3,000 staff, was also hit by a slowdown in the Chinese property market.
“I am delighted to have found a strong retail partner who will help us to release the financial value of our business in China, said Véronique Laury”