B&Q parent company Kingfisher has registered falling sales as new boss Thierry Garnier says the group’s performance has been hampered by “organisational complexity”.
The home and DIY giant recorded a 3.5% drop in total sales at B&Q to £820m, down 3.4% on a like-for-like basis in the quarter to October 31.
Group sales across the UK and Ireland rose 0.3% year on year to £1.3bn, driven by a 7.9% increase in sales at Screwfix to £477m, up 3.7% on a like-for-like basis.
Across Kingfisher, sales declined 3.1% overall to £2.9bn, down 3.7% in like-for-like terms and exacerbated by a 6% fall in sales across the group’s French division to £1bn, down 5.7% and 6.2% at Castorama and Brico Depot respectively.
The retail group attributed its declining like-for-like sales to ongoing “disruption from new range implementations, lower promotional activity and ongoing operational challenges in France, and softer market conditions in our main markets”.
Kingfisher said it continues to expect its full-year group gross margin after clearance to be flat year on year, at which time the group will provide an update on the business and its strategic priorities.
Garnier said: “In my first eight weeks at Kingfisher, I have immersed myself in our operations, listened to colleagues, visited stores and met with our customers and suppliers. I am proud to be leading a Group with strong assets, excellent market positions, differentiated business models and strong brands. I have also been encouraged by the commitment of our colleagues, and by proof of product innovation.
“However, it is clear that there is much to do to improve our performance. Kingfisher’s trading during Q3 was disappointing. My early assessment is that we have not found the right balance between getting the benefits of group scale and staying close to local markets. We are suffering from organisational complexity, and we are trying to do too much at once with multiple large-scale initiatives running in parallel. Altogether, this has brought disruption to sales and has distracted the business from focusing on customers. In addition, we faced softer market conditions in our main markets during the period.”
He added: “I am pleased to have strengthened my executive team with the appointment of three outstanding leaders: Bernard Bot, a seasoned CFO with a strong background in supply chain and digital; Alain Rabec, a highly experienced retailer as our new CEO of France; and John Wartig, formerly our interim CFO, as our chief transformation and development officer. Further appointments are in progress.
“As a team, our priority is to fix our operational issues – particularly in IT and supply chain in France – and refocus our efforts. This includes stopping or pausing a number of initiatives to concentrate on stabilising performance and trading. The effect of these changes will not be immediate.”
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