Kingfisher boss Ian Cheshire has insisted that the DIY giant’s growth plan remains on track despite profits slipping for the first time in five years last year.
Cheshire admitted last year was “tough” after wet weather washed out April and most of the summer, resulting in adjusted pre-tax profits falling 11.4% to £715m.
“It was a tough year and the first time in five years numbers have gone backwards. But we’re getting on with building a worldclass retailer.”
Cheshire also pointed out that Kingfisher has a strong balance sheet and has eliminated its net debt in the year.
“We generated great cash flow and paid off our debt,” said Cheshire. “The long term picture remains unchanged.”
The retailer will focus on transforming B&Q into an omnichannel business, and will relaunch the website in the summer.
“We’re doing a heart and lung transplant for the way we operate,” said Cheshire. “This year is critical in getting B&Q from a store-based retailer to an omnichannel retailer.”
Kingfisher will also upgrade websites across the group.
Online sales make up just 1% of overall B&Q sales, and Steve Willett, Kingfisher’s group productivity and development director, expects this to grow to between 5-10% of sales.
Web sales make up 5% of total sales across the whole DIY market.
The retailer is also right sizing its UK store estate and has three agreements with food retailers to carve up existing stores. Retail Week revealed last year that B&Q was to split its 120,000 sq ft store in Belvedere, south London and sublet 60,000 sq ft of space to Asda.
Cheshire said that in the new smaller store it is “taking almost the same amount of money” as the larger old store.
He added that Kingfisher could make the same money with 20% less space across the portfolio, and is aiming to downsize further stores.
“It could be a fantastic unlock. It could be really significant for our returns,” he said.
However he cautioned it is “not going to be a quick fix” because landlords and planning authorities had to agree.