B&Q owner bids to cut store space after revealing drop in profits

B&Q’s profits crashed nearly 21% to £187m, dragged down by last year’s shocking weather and losses in its Irish stores.

THE owner of DIY chain B&Q says it’s got too many stores – as it posted the first drop in profits for five years.

Kingfisher revealed it is in talks with other retailers about sub-letting space in branches to cut its rent bill.

Boss Ian Cheshire said: “If you started with a blank sheet of paper, you could probably take the same amount of trade in 20% less stores.”

While insisting all 350 B&Q branches were profitable, he said the firm had some “radical” ideas to reduce its rent, adding: “We are second only to Tesco in terms of space in the UK.”

One B&Q store has already been halved in size, with supermarket chain Asda taking the rest of the space.

Plans are in place to reduce another three stores in a similar way, with a further branch earmarked for closure.

Kingfisher claimed jobs wouldn’t be lost when it cuts back space.

The move came as Kingfisher announced profits tumbled more than 13% to £691million last year.

B&Q’s profits crashed nearly 21% to £187m, dragged down by last year’s shocking weather and losses in its Irish stores.

On the wash-out that was 2012, Cheshire said: “You have four big bank holidays a year which are the equivalent of Christmas trading for us.

“You might expect to lose one because of the weather but we lost all four, and that was across Europe.”

The record wet weather wiped £25m off B&Q’s profits in the UK alone, although Wellington boot sales were up 25% – and flood pumps by nearly as much.

This year’s snow has compounded the firm’s ­problems.

Cheshire said it is responding by reducing seasonal lines, such as ­barbecues, and centralising stock where possible so it can better react to the weather.

Kingfisher was also hit by different exchange rates, which cost it £39m when overseas ­earnings were converted into sterling.

But the firm – which has gone from having a £1.6billion debt in 2008 to net cash in the bank – still found money to reward shareholders after increasing its full-year dividend by 7%.

Kingfisher is the third-largest DIY retailer in the world, with more than 1,000 stores in eight countries.

Source : Graham Hiscott – The Mirror
www.mirror.co.uk/money/city-news/bq-owner-bids-cut-store-1787066