As growth opportunities in the UK begin to narrow, retailers have increasingly looked overseas to expand their businesses.
As growth opportunities in the UK begin to narrow, retailers have increasingly looked overseas to expand their business. Yet, while fashion retailers are leading the way in this respect, there are very few UK home and DIY retailers that have dipped their toes in international waters.
So it was interesting to note the news that came from two of the largest in the sector last week. Kingfisher and Carpetright are among the minority of home retailers that operate stores abroad, and both had different stories to tell.
Kingfisher is an incredibly global business. Although it is headquartered in London and its flagship business is B&Q, it makes more money in France than it does in the UK. It also has sizeable businesses in Poland, Russia, Spain, Turkey and China, and is launching into Romania and Germany too.
When the UK market suffered last year, its global presence helped offset any declines. In its most recent 12-month trading period, France struggled while sales in Poland and Russia climbed.
However, it has not all been plain sailing. Kingfisher announced it was to pull out of Italy in 2008 and has had its China business under review for years, culminating in it last week revealing it was seeking a partner for it. That’s a smart move from Kingfisher - it wants to remain committed to the huge market, but knows it needs local knowledge to make it work.
Carpetright also knows a thing or two about turbulent overseas markets. It is suffering substantial sales declines in the Netherlands due to a slump in consumer confidence. Like-for-like sales in its Rest of Europe arm, which comprises Netherlands, Belgium and the Republic of Ireland, fell 5.3% in the eight weeks to March 22.
Topps Tiles has also found The Netherlands a tricky place to do business. It pulled out of the country in 2009.
Given the troubles of some, it is not surprising that the majority of home and DIY retailers are not attracted by the lure of overseas expansion. Take DFS. The sofa giant has only spread its tentacles as far as Ireland, and that was as recently as 2012.
It is taking a prudent approach to expansion, prioritising maximising growth opportunities in its domestic market before thinking about expanding abroad. For many, home is where the heart is.