B&Q to axe hundreds of staff

TROUBLED DIY chain B&Q will cut nearly a third of its head office workforce this week only days before an expected warning by its parent company Kingfisher that profits will slump £50 million below forecasts.

Staff at B&Q's Southampton headquarters will be told on Tuesday that 400 jobs out of 1,400 will go following a review by new chief executive Ian Cheshire. At the same time, Kingfisher chief executive Gerry Murphy will be away on a trade mission to China with Prime Minister Tony Blair.

The job cuts come only a week ahead of Kingfisher's interim statement on September 15, when Murphy will outline a further slump in profits at the home improvement giant that also includes Screwfix as well as Castorama and Brico Depot overseas.

Kingfisher has seen profit forecasts slashed for the year to next January. Less than 12 months ago, analyst predictions were as high as £694m. But a series of gloomy trading statements have brought estimates down to less than £550m.

With Kingfisher having to swallow the costs of B&Q's dramatic restructuring, it is now expected to warn that group profits could fall below £500m.

Kingfisher said in the spring that group sales were down by eight per cent, and it is expected to say that trading has hardly improved. The August Bank Holiday, usually strong for DIY retailers, was disappointing as hot weather and the Ashes Test against Australia kept customers away.

Cheshire's review is expected to criticise the way the chain has been run, failing to attract the growing number of female DIY shoppers and the building trade market.

Kingfisher is experimenting with new stores that cater to the 'softer' end of DIY, selling items such as home furnishings. It also has two experimental trade-only outlets.

Source : Mail on Sunday