Kingfisher will close 60 B&Q stores after a 7.5% drop in annual profits amounting to £675 million, putting more than 3,000 jobs at risk.
Chief Executive Veronique Laury, who took charge of Kingfisher at the end of last year, announced the move as an overhaul of its 360-store network. This also includes the departure of UK and Irish business head, Kevin O’Byrne.
The sad news was announced just days after its failed attempt to take over the French DIY giant Mr Bricolage. According to the FTSE 100 Company, the closures will take place over the next two years. Six stores have already been identified as definite candidates for closure. Unprofitable stores in Mainland Europe will also be closed down.
In an effort to reduce employment cuts, the company plans to deploy half of the affected staff into nearby stores. The new owner also plans to create 900 new jobs for its Screwfix chain, which will open 60 new stores this year.
The closure follows an ill-fated attempt to lease parts of the largest B&Q stores to its major competitors. Only eight deals were given the green light out of a planned 18, so the plan was abandoned and bosses resorted to closures as an alternative.
While rival Homebase blames the public’s lack of DIY skills for some of its own stores being closed, Kingfisher CEO believes that there is a substantial market for the home improvement industry. She adds that they only need to reorganise themselves to discover this potential.
Despite the apparent problems, Laury may be proved right if market conditions sway in B&Q’s favour. Some of their 393,000 available products will soon see their prices slashed, since reports show that only 7,000 of these are generating significant sales. However, overall sales actually increased last year, and the main thing dragging down performance was the exchange rate impacting income from Europe. This might mean that seeing the back of their European outlets could help B&Q recover soon.