Veronique Laury has certainly put a marker down since taking over as chief executive of FTSE 100 DIY group Kingfisher from the much-garlanded Sir Ian Cheshire in December. She’s cleared out the leadership team, announced the closure of a sixth of B&Q’s 360 stores and put into action a plan to turn ‘a locally managed set of businesses’ into ‘ONE’ Kingfisher (caps and quote marks included).
But continuing economic malaise in France, where it makes a third of its sales, and the increasing trend to employ tradespeople rather than doing your own DIY, isn’t making Laury’s job easy.
Kingfisher’s adjusted sales (i.e. stripping out one-offs like the sale of B&Q China) for the 26 weeks to August 1 fell 4% to £5.4bn, although stripping out currency swings they did rise 3.5%. Adjusted pre-tax profits slipped 2.3% to £384m.
Its French sales dropped 10.4% to £1.98bn, although they had risen 1.1% before the weakening Euro is taken into account. Meanwhile, in the UK & Ireland, B&Q’s revenues crept up just 0.2% to £2.03bn. Screwfix, on the other hand, had a great six months: sales up 27.9% to £494m.
Essentially, the DIY craze, which boomed along with the housing market pre-2008, has faded and people are increasingly turning to the professionals – who go to Screwfix to buy their gear. So the announcement of 200 new stores in the UK, up from 412 today, makes a lot of sense.
Laury has also made her ‘first ‘sharp’ decisions’ (one assumes she’d rather not call them ‘hard’), cutting the number of different products sold across the group, standardising stores and sites across the different brands and rolling out a single IT system - 'ONE' Kingfisher to rule them all, clearly. Perhaps most importantly, the new ‘international leadership team’ is finally sorted, which should mean more stability.
Kingfisher’s shares still slipped 2.3% to 351.9p by midday, although they have risen 14% in the last year. The task ahead of Laury doesn’t look any easier – but what turnaround ever does?