B&Q owner Kingfisher in spotlight over turnaround plans
B&Q owner Kingfisher is expected to deliver an update to the City on its turnaround plans when it posts half-year results on Tuesday.
It is six months since Chief executive Veronique Laury, who took over from Sir Ian Cheshire in December, detailed her programme to overhaul the group, which includes closing as many as 60 B&Q stores over the next two years, affecting around 3,000 jobs in the UK and Ireland. The group said it can adequately service its customers from fewer stores.
There has also been speculation that the group might phase out the B&Q brand name. Other plans include cutting back on some of the 393,000 products sold across the company, particularly as only 7,000 items – amounting to 7% of sales – are sold in at least two of Kingfisher’s operating companies.
The group is expected to post half-year pre-tax profits up 1% to £380 million. It comes after B&Q notched up a 3.4% rise in like-for-like sales in the second quarter in the ten weeks to July 11, driven by strong demand for cooling products and outdoor seasonal goods.
This was a marked turnaround on the 1.1% fall in sales across B&Q in the previous quarter.
Meanwhile, Kingfisher saw another solid performance from its trade-focused building supplies chain Screwfix, where like-for-like sales leapt 16.7% higher, helping its overall UK and Ireland division to increase second quarter comparable sales by 5.5%.
Sales in Kingfisher’s French chains Castorama and Brico Depot also rose after falls in the first quarter, lifting 1.7% and 0.7% respectively over the 10 weeks to July 11.
This helped group-wide same store sales increase 3.5%. For the 23 weeks to July 11, the group was up 2.1%.
The improvement for B&Q comes as rival Homebase is also seeing an upturn, with a 5.9% improvement in trading in the 13 weeks to August 29, although this was partly driven by stock clearance sales amid a programme of store closures.Source: http://business-reporter.co.uk/2015/09/11/bq-owner-kingfisher-in-spotlight-over-turnaround-plans/