HOME improvements retailer Kingfisher is to close about 60 of its B&Q stores over the next two years as part of a shake-up that will affect 3,000 staff across the UK and Ireland.
B&Q has 360 stores and the closures, which will trigger exceptional costs of about £350 million for its parent, will be accompanied by the scaling down of a further six branches.
Staff in Dundee, Barnsley, Birmingham, Hyde in Greater Manchester, Mansfield and Southampton have so far been told their stores are closing, but the locations of the other shops have not been disclosed.
The group also said that Kevin O’Byrne, chief executive of B&Q UK & Ireland, will be leaving the business next month.
The closure plans came as Kingfisher, which also owns Screwfix, posted a 7.5 per cent drop in adjusted pre-tax profits to £675m for the year to 31 January. Revenues at the group fell 1.4 per cent to £11 billion.
New chief executive Véronique Laury said: “Home improvement is a great market with huge potential and Kingfisher has a strong position within it with further scope to grow in a sustainable way.”
Laury, who took over from Sir Ian Cheshire in December, added: “However, it is clear to me that we need to organise ourselves very differently to unlock our potential.”
Other plans include the closure of loss-making stores in Europe, cutting back on some of the 393,000 products sold across the company, particularly as only 7,000 – amounting to 7 per cent of sales – are currently sold in at least two of Kingfisher’s operating companies.
The company will also look to optimise vacant store space and is in talks with several retailers about sub-letting opportunities.
Kingfisher said it believes it can meet local customer needs from fewer stores and stressed that the B&Q closures were not in response to signs that Britons are becoming less keen on DIY.
Last year, rival DIY chain Homebase said it would close a quarter of its stores – about 80 outlets – in the period up to early 2018. Kingfisher said it expects to offset the B&Q jobs impact by opening a similar number of shops at Screwfix and through redeployment.
Brewin Dolphin analyst Nicla Di Palma said: “This new strategy makes sense. In the UK, Kingfisher over-expanded in the late 90s and early 2000s and now finds itself with too many stores and very long leases.
“Exiting now means better industry structure and pricing power.
“We also think unifying the offer across countries makes sense: consumers want similar things in different countries.”
B&Q UK & Ireland’s total sales were up 1.9 per cent to £3.7bn in the financial year, with sales of outdoor seasonal and building products up 4 per cent. Profits were 16 per cent higher at £276m.
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