Cutting store and product tail as part of One Kingfisher
Kingfisher has announced the closure of around 60 B&Q stores, 15% of its DIY brand’s estate, as part of a series of “first sharp decisions” to unlock the group’s potential and create ‘One’ Kingfisher.
The B&Q store closures will take place over the next two year and the company also plans to close loss-making stores in Europe.
Sales of Kingfisher were up by 2.9%, for the year ended January 31, 2015, however adjusted pre-tax profit was down 7.5%.
Whereas, Kingfisher UK & Ireland sales saw a 5.5% increase, up to £4.6million with a 16.1% increase in profit to £276million.
B&Q UK & Ireland sales were up 1.9% to £3.765million, although sales of showroom products were down 5% driven by the decision to reduce promotional activity. However, sales through its ‘Click, Pay, Collect’ online transactions grew 63%.
In addition, omnichannel business Screwfix grew total sales by 25.5% to £835million and opened 60 outlets, taking the total to 395.
In addition, the Kingfisher Group will also rationalise its product ranges as only 7% of products are sold across two companies. It also reported “few known manufacturer brands across the sector. There is therefore an opportunity for Kingfisher to develop a unique offer”.Kingfisher announced group sourcing now stood at 22% of sales and its own brand product ranges accounted for 30% of sales.
In a bid to drive through the changes, it has announced a leadership team with Arja Taaveniku (former global business area manager for IKEA Kitchens & Dining and CEO of Ikano Group) as chief offer and supply chain officer. CEO of group sourcing and offer Guy Colleau is now operations director for Big Box (B&Q, Castorama and Koctas). Alain Souillard CEO of Brico Depot International is operations director for Medium Box (Brico Depot). CEO of group productivity and development Steve Willet is now omnichannels operations director (Screwfix), as well taking the role of chief digital & IT officer.
In its full-year results Kingfisher stated the European home improvement market is worth £235billion, and that the group has a 5% share.
Chief executive officer of Kingfisher Veronique Laury commented: “Home improvement is a great market with a huge potential and Kingfisher has a strong position within it with further scope to grow in a sustainable way. However, it is clear to me that we need to organise ourselves very differently to unlock our potential. This will involve taking what is essentially a locally-managed set of businesses and creating instead a single, unified company where customer needs come first. The first step in developing this new organisation is the creation of a new, international leadership team with more focused cross-company roles.”
She continued: “We have a lot to do and we are announcing today a set of first ‘sharp’ decision which are already underway including the closure of around 15% surplus B&Q space and our few loss-making stores in Europe, the development of unified garden and bathroom businesses and the start of a Big Box revitalisation programme across Europe.
“In addition, we will be developing our detailed plans for the wider reorganisation of the company as we progress on this exciting journey towards becoming ‘One’ Kingfisher.