Kingfisher is seeking to learn lessons from the stellar success of Apple and Zara by creating a unique proposition as new boss Veronique Laury overhauls the business.
The B&Q-owner Kingfisher revealed a radical overhaul of its structure today as Laury seeks to create a “One Kingfisher” model that will allow greater coordination between the group’s different operating companies.
Laury believes Apple, Zara and Primark have succeeded by doing things differently from other retailers and have prospered because of their distinct propositions.
Laury said Apple has proved it is possible to run large retail spaces with only a small quantity of product, while Zara has succeeded despite having little data about its customers and Primark is thriving without an ecommerce operation.
She said: “There is no one winning formula, what they are doing is innovating and giving something unique to the customer. The reality is there is not one convenient home improvement format that has worked yet from a financial point of view.”
Laury said Kingfisher was also taking inspiration for new product design from Henry Ford, who famously said that if he had asked customers what they wanted they would have asked for a faster horse.
Laury said: “I’m not talking about asking what the customers want, I’m telling them about what they need.”
Laury believes having a standardised store operating model will make it easier to expand. Kingfisher has appointed new directors as it reorganises the business by store size and channel rather than fascia. As part of the restructure B&Q UK boss Kevin O’Byrne is leaving.
Kingfisher hopes that by segmenting the business in this way it will reduce its amount of SKUs and create more overlapping product lines between its different businesses.
At present Kingfisher sells 393,000 products across its businesses, only 7% of which are sold by two or more of its operating companies.
Own brand accounts for 30% of the DIY group’ sales and it expects this number to increase as it sharpens its focus on the design, buying and manufacturing process.
Kingfisher also revealed it will close about 60 B&Q stores across the next two years despite them not being loss making.
Laury said: “The problem with those [closing] stores is their sales per square foot is too low – they have all the costs of a very big store with very low sales.”
The 60 stores employ 3,000 people, but chief financial officer Karen Witts said the amount of job losses would be “quite neutral” due to natural churn in the industry and because staff would be offered jobs at new Screwfix stores.
Screwfix is opening 60 stores this financial year and hopes to open a similar number the following year, creating 900 jobs this year.