Kingfisher has revealed that it too will soon be seeking retail space for a wide-ranging expansion of its Screwfix brand, the UK’s largest direct and online supplier of trade tools and products.
The plan to open 200 additional Screwfix stores follows the news that sales at the chain during the first half rose by 16.5 per cent to £494 million. Once these additional stores have opened, Screwfix will control a portfolio of 612 UK stores, all containing an extensive range of tools and plumbing and electrical equipment.
The announcement was made by new Kingfisher chief executive Veronique Laury, who is at present focusing uon a restructuring programme to bring the retail giant back to strong profits. Unfortunately, the group’s latest results have demonstrated just how necessary this programme is, as in the six months to the 1st of August both sales and profit plummeted relatively sharply.
Despite analysts predicting a 1 per cent rise in adjusted profits for the first half, pre-tax profits in fact fell by 2 per cent to £386 million, largely due to poor trading in Kingfisher’s French division and the impact of higher borrowing costs. However, like for like sales rose by 2 per cent, indicating that the restructuring programme is beginning to bear fruit.
Many of the problems currently facing Kingfisher lie with the B&Q brand, which by the first half of next year will see around 15 per cent of its current store portfolio closed down permanently. This will amount to around 60 stores in total, although Ms Laury was quick to reassure staff and customers that rumours of a complete chain closure are unfounded.
Yet it is not just in the UK that the Screwfix brand will be setting its sights on expansion, as executives have also revealed plans to launch a pilot store in Germany in the coming year. At present, it has not been confirmed how many other European countries are in the brand’s expansion pipeline, although given recent sales performances it is unlikely that France will be on the radar for the coming year.
Ms Laury insisted that the results of the first half demonstrate the “good progress” being made under the group restructuring programme, which she refers to as the “ONE” initiative.
She said; “We have been working at pace on our set of first ‘sharp’ decisions. I am pleased that we have delivered a solid first half of the year.There remains a lot to be done, however.”
