Kingfisher to axe around 60 B&Q stores over the next two years
- Credit: PA
Home improvement chain B&Q is to close as many as 60 stores over the next two years as part of a restructuring of its UK and Ireland business.
Parent company Kingfisher, whose UK business also includes Screwfix, plans to axe about 15% surplus space as a result of the review of its 360-strong B&Q estate.
Kingfisher has yet to confirm whether any branches in East Anglia will be affected but the B&Q store on the Euro Retail Park in Ipswich, previously acknowledged by the firm as being too large in relation to the level of trade, could be among those at risk.
The move was announced as it posted a 7.5% drop in annual profits to £675million after sales fell by 1.4% to £11billion in the year to January 31.
Kingfisher, which also trades in France through Castorama and Brico Depot, has already agreed to sell a controlling stake in its loss-making China business as it looks to focus on its core European market.
Chief executive Veronique Laury, who took over from Sir Ian Cheshire in December, said the 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.”
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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 currently 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 said the impact on jobs from the B&Q store closure plan will be broadly neutral as it is opening about 60 outlets under the Screwfix brand, while it will also look to redeploy positions to other parts of the business.
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.
B&Q UK & Ireland’s total sales were up 1.9% to £3.7bn in the financial year, with sales of outdoor seasonal and building products up 4%. Profits were 16% higher at £276m.
In contrast, profits in France were 12% lower at £349m due to the impact of weak consumer confidence and a declining housing and construction market. Kingfisher said it will close a small number of stores in the country.