Darty reaps rewards from major restructuring | RetailDetail

Darty reaps rewards from major restructuring

Darty reaps rewards from major restructuring

Following several difficult years, the French electro group Darty, which owns Belgian Vanden Borre and Dutch BCC, has resurfaced once more. The decision to fall back to its three traditional home markets is paying off.

Organic growth again

In its fiscal year, from 1 May 2013 to 30 April 2014, Darty had to take a 6 % turnover drop to 3.58 billion euro, but mainly because of the divestment in onerous Turkish and Spanish activities. A like-for-like comparison shows a 1.7 % turnover increase, particularly in a struggling market.

 

French sales, through 228 Darty stores (4 as a franchise store), it has managed a 2.8 % like-for-like turnover increase in a market that dropped 2 % in general. The 117 Belgian and Dutch stores dropped slightly (- 1.2 %) to 686.7 million euro. Vanden Borre grew its market share in a market which shrank 3 %. BCC lost market share in a strongly competitive market which dropped 2 %.

 

Huge cost-cutting measures resulted in a 9.5 million euro profit (after tax), compared to a measly 300,000 euro last fiscal year, which is something to applaud.

 

End of a turbulent period

That seems to be the end of a turbulent period, which started when British Kingfisher decided to spin-off its French subsidiary in 2003 (after buying it in 1994), add it to its British subsidiary Comet and bring it to the British stock exchange as "Kesa". Management wants international growth and opens stores in Switzerland, Spain, Italy and Turkey, but these investments also increase the losses.

 

Kesa is forced to sell Comet in 2012 and with a new CEO (Régis Schultz, former Kingfisher), it decided to pull back into its traditional home markets (France, Belgium and the Netherlands). Every Spanish and Italian store is closed, the Turkish subsidiary is sold and the Czech and Slovakian stores should be sold soon as well.

 

Franchising, kitchens and multichannel

Despite the difficult market conditions, Schultz believes the company should strive to increase the number of franchise stores from 4 to some 100 to 150 stores in France, within 4 years. More stores should also have a focus on kitchens, as merely 55 do so nowadays and Schultz wants at least another 120. With that, the kitchen turnover should double from its current 80 million euro level. It is a well-known fact that profit margins for kitchens are way higher than for electrical appliances.

 

Darty will also place full faith in its multichannel strategy, with its recent purchase of the mistergooddeal.com web shop, allegedly the largest French electro web shop, ahead of CDiscount (belonging to the Casino group) and Amazon. Every store will also become a click & collect pick-up point.

Questions or comments? Please feel free to contact the editors


Xiaomi's European conquest goes through Paris

23/05/2018

Chinese smartphone manufacturer Xiaomi just opened a physical store in Paris, part of its ambitious European expansion plan. The brand is also dreaming of an American launch.

Fnac Darty and MediaMarkt Saturn enter purchase alliance

16/05/2018

French electronics retailer Fnac Darty has set up a purchase alliance with competitor MediaMarkt Saturn. Both companies will buy together when it comes to the European retail market.

Amazon looking to outbid Walmart in Flipkart deal

03/05/2018

The battle for dominance on the Indian e-commerce market seems to be stepping up a notch: Amazon may be looking to buy a majority stake in Flipkart, trying to better Walmart which already started negociations with the Indian online retailer.

Amazon is working on domestic robot

24/04/2018

Amazon is secretly working on robots for consumers. According to press agency Bloomberg, the tech giant wants to trial the robots at their employees’ homes and wants to present its domestic robots in 2019.

Fnac Darty continues growth thanks to collaborations

23/04/2018

Electronics group Fnac Darty has achieved a small turnover growth in the first quarter of 2018. The group also says it took major steps in its recovery plan: before the end of 2018, it seeks 130 million euro in synergies.

‘Schnäppcam’ lures customers back to the store

16/04/2018

It seems a lost fight to compete with web shops, but not every retailer is simply throwing in the towel. A German household appliance seller has found an original way to entice customers.