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Jobs hit as B&Q closes 60 stores

DIY chain B&Q is to close as many as 60 stores over the next two years in a shake-up set to impact on 3,000 jobs in the UK and Ireland.

Parent company Kingfisher, which also owns Screwfix, wants to cut about 15% of surplus space through the review of its 360-strong B&Q estate.

Staff at Southampton, Dundee, Baums Lane in Mansfield, Stetchford Road in Birmingham, Hyde in Greater Manchester and Barnsley have been told their stores are closing, but the locations of the other shops have not been disclosed.

The company said it believes it can meet local customer needs from fewer stores and stressed that the 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 sister business Screwfix and through redeployment.

The changes were announced as the company posted a 7.5% drop in annual profits to £675 million after sales fell by 1.4% to £11 billion in the year to January 31.

The performance was impacted by trading in France, where Castorama and Brico Depot were hit by the weak economy and low consumer confidence.

B&Q UK & Ireland's total sales were up 1.9% to £3.7 billion in the financial year, with sales of outdoor seasonal and building products up 4%. Profits were 16% higher at £276 million.

In contrast, profits in France were 12% lower at £349 million as Kingfisher announced it will also close a small number of stores in the country.

Chief executive Veronique Laury, who took over from Sir Ian Cheshire in December , said the UK and Ireland closure plan was one of a number of "sharp" decisions being taken by the FTSE 100 company.

She added: " 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. However, it is clear to me that we need to organise ourselves very differently to unlock our potential."

Other plans include cutting back on some of the 393,000 products sold across the company, particularly as only 7,000 - 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.

Ms Laury denied that the UK DIY market was in decline and said the store closure plan reflected a desire to reinvigorate the company's UK offer. She added that it had long been clear that B&Q had too many stores in its estate.

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.

The company's shares rose 3% today.

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."

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