DIY giants need to do repairs on till figures
CRACKS appeared in two of Britain’s home improvement giants yesterday as disruption from major business makeovers and mixed weather dented sales at B&Q and Homebase.
About £270million was wiped off the value of B&Q owner Kingfisher as it posted a 1.9 per cent drop in same-store sales during the second quarter, despite another strong performance at its Screwfix chain – used by tradesmen, especially plumbers and electricians – and where turnover increased by 10.8 per cent.
Kingfisher blamed “disruption” from its ongoing five-year transformation programme, which aims to boost annual profit by £500million by 2021 and simplify product ranges. B&Q sales were down 4.7 per cent as demand for garden furniture and barbecues cooled. This was partly due to a fine spring encouraging customers to bring forward seasonal buys, leading to a 10.7 per cent drop in the three months to July 31. Sales at its French operations fell 3.8 per cent.
Kingfisher chief executive, Veronique Laury, said: “We were well aware that this year would be challenging given the step up in transformation activity, though we remain cautious on the second half outlook for the UK and France.” Shares fell 12½p to 294¾p.
The UK business of hardware chain Bunnings, whose Australian owner Wesfarmers bought Homebase last year for £340million, suffered a 4.3 per cent fall in stores open at least a year in the three months to June 30.
Bunnings UK posted a £54million annual loss, which included £19million of restructuring costs. It plans to have 20 Bunnings Warehouse outlets by the end of this year,.
Wesfarmers managing director, Richard Goyder, admitted “significant disruption” from repositioning Homebase had hit sales of kitchen and bathroom products particularly hard.
He said: “The historical poor performance of Homebase is expected to continue in the short term. “The first four Bunnings pilot stores were opened during the year and early indications are that the format is resonating well with customers.”