New Kingfisher chief to slash DIY suppliers list

Kingfisher chief executive Gerry Murphy plans to cut supplier numbers to reduce costs.

Murphy said the retailer - which is to demerge its electricals business - has thousands of suppliers to its DIY chains. There are 1,800 suppliers to B&Q China alone, and 1,200 to Castorama.

He said the strategy will result in an increase in the proportion of own-label products and supplier numbers will fall to approximately 1,000 key companies.

'The aim is to provide cheaper goods for our customers, to give more business to (a smaller number of suppliers) and to give more value to shareholders,' said Murphy.

Kingfisher will source more product directly for own-labels, including power tool brand Performance Power. Murphy said Performance Power has now overtaken Black & Decker as the UK market-leading power tool brand.

Hong Kong and Shanghai-based sourcing division Kingfisher Asia Ltd (KAL) has calculated that a cost saving of 30 per cent can be made on products that are directly sourced. KAL supplies around 10 per cent of B&Q product.

Williams de Broe retail analyst Tom Gadsby said: 'As long as it continues to buy well and maintain a good range for customers, it should be fine.'

Murphy said Kingfisher is well placed to ride any downturn if spending should fall in the coming months.

He said: 'Nobody is isolated from the big bad world, but we are cautiously optimistic.'

'Our focus on the home and on value should serve us well if the markets take a turn for the worse. Our strategic focus on costs and efficiency may prove very timely.'