B&Q-to-Screwfix parent company Kingfisher said today that it would continue to invest in ecommerce while rightsizing its estate by reducing floor space at selected stores, as it positions itself for an omnichannel future.
Unveiling an 13% fall in full-year pre-tax profits to £691m and a 2.4% fall in total sales to £10.6bn, the Kingfisher group said it was putting the focus on change to build the business for the long-term.
The company, which also trades as Castorama and Brico Dépot in France, has stakes in German retailer Hornbach and in Koçtaş in Turkey, said that sales were being hit by weaker consumer confidence in three key markets, with record wet weather hitting UK profits to the tune of about £25m, but that it was concentrating on improving the business for the long-term through its Creating the Leader change programme.
That means building on recent investment in ecommerce that saw in the last year omnichannel platforms launched for Screwfix and B&Q’s TradePoint over the last year and B&Q’s online offer expanded ahead of the launch of a fully-upgraded B&Q website in 2014. Multichannel advances during the year also included the launch of a Screwfix mobile ‘click, pay and collect’ offer that now accounts for 55% of its total mobile sales.
But it also means rightsizing the B&Q store estate. While a net 70 new B&Q stores were opened in the UK in 2012/13, a deal was also completed to reduce the size of one B&Q store by 50%, with a supermarket group moving into the excess space. Kingfisher said “further opportunities” were now being investigated, with four more rightsizing agreements already in place. The move to reduce the size of those five stores along will represent about £30m cost savings related to leases.
Kingfisher is also trialling new store formats in markets including the UK, and working on a new-look 4,000 sq m design centre store for the Chinese market, where features will include improved service and displays as well as an improved omnichannel offer.
Ian Cheshire, group chief executive, said: “Looking ahead, although we expect market conditions to remain challenging, we will continue to actively manage the business, optimising the generation and use of cash and driving longer-term success through our own actions. I remain very confident in our prospects, with clear initiatives underway to make it easier for our customers to have better and more sustainable homes.”
