B&Q owner Kingfisher to expand in Russia

Kingfisher, the owner of B&Q, will today give David Cameron's trip to Russia a major boost by announcing a £150m investment in the country.

The British DIY retailer now makes two-thirds of its profits overseas and will unveil a plan to open nine new stores in Russia, expanding its Castorama shops as far east as Ekaterinburg.

Kingfisher intends to tap into the growing trend for home improvement among the Russian middle classes.

The announcement will be made by Ian Cheshire, chief executive, who is one of the businessmen accompanying the prime minister on his trip to Moscow, along with BP's chief executive Bob Dudley.

Downing Street is hoping that the Kingfisher deal is just one of many that can be struck as Mr Cameron attempts to build better relationships between the UK and Russia.

It is the first visit by a British prime minister since the death of former KGB agent Alexander Litvinenko in London in 2006.

Russia's refusal to extradite Andrei Lugovoy, who Britain wants to prosecute for Litvinenko's alleged murder, has caused relationships between the two countries to sour.

Kingfisher already operates 17 Castorama home improvement stores in Russia, with the first one opening in 2006. Kingfisher was originally going to use the B&Q brand – the shop it uses in China – but there is no 'Q' in the cyrillic alphabet.

Mr Cheshire said: "Russia represents a major opportunity for Kingfisher. Our trading performance there has been encouraging and we look forward to opening these nine new Castorama stores and many more in the future."

Russia's economy has grown quicker than most in Europe. GDP grew by 3.7pc on a year-to-year basis in the first six months of 2011.

Last year Kingfisher's sales in Russia grew by 39pc to £240m. It is understood to think that its Russian stores could match its Polish ones, which generate sales of £1bn.

Kingfisher is one of a number of British retailers in Russia, including Burberry and Next, taking advantage of the increasing wealth of the country's middle classes.

This week Kingfisher is expected to announce a jump in half-year profits from £351m to £413m, one of the few retailers able to report healthy figures.

Source : Harry Wallop – Telegraph.co.uk
www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8756050/BandQ-owner-Kingfisher-to-expand-in-Russia.html