Castorama holds firm as French DIY sector shrinks

Last year the French DIY market shrank for the first time in more than a decade.

But, while the sector’s sales slipped by 1.1 per cent, Kingfisher’s market-leading Castorama business maintained level like-for-likes. The outperformance was reflective of improvements begun before the downturn that put it in a strong position to cope.

Under the leadership of Philippe Tible, Kingfisher-owned Castorama recognised in 2003 that it needed to change. Its strengths were also creating areas of weakness. Its strong brand was seen as male- orientated so the chain was not appealing enough to women who were a vital constituency as the market shifted towards decorative and showroom product.

Castorama’s transformation programme maintained its strengths while evolving alongside consumers and the wider market. The retailer now splits its business into two areas: the “house to build” and the “house to live in”, tailored to varying customer expectations.

The retailer has also changed how it does business. After the creation of Kingfisher France following Ian Cheshire’s appointment as group chief executive in 2008, French operations are run as one business rather than separately.

That means, for instance, that there is much more co-operation between Castorama and low-price sister chain Brico Depot, which caters more for heavy DIY and professional customers.

At one time, both chains cannibalised each other’s sales and cost benefits that should have arisen from group ownership were insufficiently realised.

Now Kingfisher France is moving forward under a “two companies, two business concepts, one strategy” model, bringing opportunities to save money through common sourcing, sharing best practice and leveraging own-brands.

Such benefits, alongside sales improvements delivered by Castorama’s store modernisation programme, should help the retailer maintain momentum.

So far, almost half of its trading space has been overhauled and revamped shops are outperforming their older counterparts.

Cheshire is confident the improvements at Castorama will continue to bear fruit. “The French market over time has been more stable than the British. They’ve still got rising home ownership levels. They’re very home-centred people,” he said.