Kingfisher’s new Chief Executive has suggested that changes to the home improvement group’s strategy are on the way after the business posted another quarter of weak trading.
Over the 13 week period to 31 October, overall company like-for-like sales were down 3.7%. This was blamed on disruption caused by new range implementations, lower promotional activity and ongoing “operational challenges” in France, and softer market conditions in its main markets.
In the UK & Ireland, B&Q’s like-for-like sales slipped 3.4% due to the weak market conditions and the ending of the chain’s showroom installation services. This was slightly offset by growth of 3.7% in the Screwfix chain, although its performance had slowed on its first-half result.
Kingfisher’s operation in France also remained under pressure, with like-for-like sales tumbling 6.1% after both Castorama and Brico Dépôt performed poorly.
Meanwhile, the group’s other international operations saw a 5.2% drop in like-for-like sales.
Kingfisher’s previous boss Veronique Laury stepped down after failing to deliver the expected profit improvement via her turnaround programme. This had included shutting underperforming B&Q stores, shaking up its products ranges, and improving its online offering.
Former Carrefour exec Thierry Garnier, who took over from his compatriot in September, stated today that there was “much to do” to improve Kingfisher’s performance.
“My early assessment is that we have not found the right balance between getting the benefits of group scale and staying close to local markets,” he said.
“We are suffering from organisational complexity, and we are trying to do too much at once with multiple large-scale initiatives running in parallel,” noting that the softer market conditions were also unhelpful.
Garnier said that the group’s priority was to fix operational issues, particularly in IT and supply chain in France. He is also stopping or pausing a number of initiatives to concentrate on stabilising the group’s performance.
“In parallel, we are building a longer term plan to refocus on our customers, simplify our model, embrace digital and return our business to growth,” said Garnier, promising a further update in March with the group’s full year results.
