B&Q owner to shut 15pc of its UK stores due to 'oversupply'
Published 01/04/2015 | 02:30
Kingfisher, Europe's biggest home improvement retailer, plans to close 60 B&Q stores in Britain over the next two years at a cost of €485m, saying it has too many shops for the size of the market.
It is not yet clear whether any of the company's eight Irish stores will be affected.
New chief executive Veronique Laury announced the closure of 15pc of B&Q's floor space yesterday as she set out her vision for the group, which also trades as Screwfix in Britain and Castorama and Brico Depot in France and other countries.
Britain's home improvement sector is over supplied. Last October Homebase said it would close a quarter of its 323 stores by 2018 as Britons had fallen out of love with home improvement.
"We've known for many years that we have too much space in B&Q ... We have 360 B&Q stores (in the UK) and we have 100 Castorama stores (in France) for the same amount of population," said Ms Laury, who succeeded Ian Cheshire in December.
The announcement came as Kingfisher posted a 7.5pc fall in 2014-15 profit. It said that while it was encouraged by Britain's improving economy, it remained cautious on the outlook for France, its biggest market.
Kingfisher said the B&Q closures would incur the company an exceptional charge of £350m, mainly related to lease provisions over two years.
Shares in the company, the world's No 3 DIY player behind US groups Lowe's and Home Depot, have fallen 12pc over the last year.
But they rose up to 5pc yesterday and were the top riser on Britain's FTSE 100 index of bluechip companies.
"The new CEO's transformation plan sounds promising, and (the) results underline why it is necessary," said Richard Hunter, head of equities at Hargreaves Lansdown.
Kingfisher did not disclose how much money the move would save the company in the longer term.
It said it was hopeful there would be little impact on jobs due to staff leaving and redeployments to other B&Q and Screwfix stores.
The group is opening 60 Screwfix stores, smaller outlets targeted at builders.