B&Q shake-up pursued as sales slide
B&Q parent Kingfisher said it was ploughing on with a shake-up plan "at pace" as it reported a first quarter slide in sales at the DIY chain.
The retailer saw same store sales drop by 1.1% across B&Q UK and Ireland in the 13 weeks to May 2, with sales of outdoor seasonal and building products down by 4%.
A better performance from its trade-focused building supplies chain Screwfix, where like-for-like sales leapt 15.4% higher, helped the group's overall UK and Ireland division to increase comparable sales by 1.6%.
Chief executive Veronique Laury, who took over from Sir Ian Cheshire in December, said the group was making "good progress " with its overhaul.
She announced in March that as many as 60 stores over the next two years would be closed, affecting around 3,000 jobs in the UK and Ireland - one of a number of "sharp" decisions as part of a revamp plan.
On unveiling the latest sales figures, she said: " Our first 'sharp' decisions are being worked on at pace."
The group added it has agreements to offload around a quarter of the stores earmarked for closure.
Kingfisher said its UK and Ireland business was up against strong comparatives from a year earlier, when like-for-like sales rose 9.7% thanks to a later Easter and good weather.
The company, which also owns stores across Europe including Castorama and Brico Depot in France, said group-wide retail profits dropped 4.8% to £150 million after suffering a £10 million foreign exchange hit due to the weakness of the euro.
With currency impacts stripped out, Kingfisher said retail profit rose 1.4%.
The performance from the 400-strong Screwfix chain helped offset B&Q's sales blow, sending Kingfisher's UK & Ireland retail profits 9.9% higher to £74 million for the first quarter.
Shares lifted 4% as analysts at Credit Suisse said the figures were "encouraging" against tough comparisons from a year earlier.
They added in a note: "First-quarter results were slightly better than we had expected in most key areas and there is good progress on some of the 'sharp' actions."
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 company will also look to optimise vacant store space and is in discussions with several retailers about sub-letting opportunities.
Kingfisher has already agreed to sell a controlling stake in its loss-making China business as it looks to focus on its core European market.
There has even been speculation that the group might plan to phase out the B&Q brand name.
In France, one of the group's main markets, like-for-like sales fell 1.2% with currency impact stripped out in the first quarter, as Kingfisher said it was operating in a "soft market" , with industry-wide DIY sales down and a continuing slow house building market.
Elsewhere internationally, it said sales in Russia leapt 38.9% higher thanks to a boom in demand for DIY and home improvement goods in an "uncertain market" as the country battles against an economic slowdown and the falling value of the rouble.