Kingfisher is to open 200 Screwfix outlets and close one-in-six B&Q stores as the company restructures itself to reflect changing DIY habits.
The expansion of Screwfix, which is aimed at tradesmen such as plumbers and electricians is a response to British households moving away from DIY in favour of paying specialists to do home improvements.
The new Screwfix stores will expand the chain to more than 600 across the country, which will help Kingfisher offset the closure of 60 B&Q stores and the 3,000 job losses the move could entail.
Kingfisher’s chief executive, Véronique Laury, announced the expansion of Screwfix as the retailer posted half-year results.
The company, which also owns Castorama and Brico Dépôt in France, said pre-tax profits fell 1.8% to £386m in the six months to 1 August. Like-for-like sales fell 0.3% in France, but rose 3.3% in the UK and Ireland thanks to a 16.5% increase in Screwfix sales, driven by plumbers and electricians.
Laury replaced Sir Ian Cheshire at the head of the company at start of the year. Her “One Kingfisher” strategy revolves around merging the company’s international brands so that the retailer’s stores in Britain, France and the rest of Europe will sell the same products.
The plan has sparked speculation that the B&Q brand could eventually disappear in favour of Castorama.
Laury said: “I am pleased that we have delivered a solid first half of the year and have made good early progress with our ‘One Kingfisher’ plan. This plan will unlock our potential through organising ourselves very differently in order to create a single, unified company where customer needs come first.”
She denied rumours the group might axe the B&Q brand and said there were no plans currently to change the chain’s name.
The group also said it expected the introduction of the “national living wage” in April to cost it around £5m next year. A number of retailers have recently warned about the impact of the measure, which will see workers aged 25 and over paid £7.20 an hour from next April, rising to £9 from 2020.
The company said it was encouraged by the economic backdrop in the UK, but cautious about prospects in France.
Andrew Hall, a consultant at the retail analysts Conlumino, said: “Kingfisher has posted a somewhat muted set of results, as the French outlets Castorama and Brico Dépôt, and the UK’s B&Q continue to encounter a challenging macroeconomic backdrop.
“Leveraging the solid performance of Screwfix in this way is welcome but perhaps overdue news. B&Q is facing wider market issues, as demand for DIY declines amid disinterest among young consumers in particular. Reigniting consumer engagement is imperative for the retailer, and this is reflected in the focus of its recent ‘Unleash the B&Q in You’ advertising campaign.”
Kate Calvert, a retail analyst at Investec, said the update on Kingfisher’s overhaul showed the new chief executive was “getting stuck in”, but that its results were evidence that European economic woes continue to affect the business.
