Kingfisher, Europe's second largest group of DIY chains, is leaving Portugal, Russia and Spain. The group wants to focus on its primary markets, including France, where their Castorama chain is struggling.
Castorama causes trouble
As a group, Kingfisher (which includes French chains Brico Dépôt and Castorama, as well as British chains B&Q and Screwfix) is doing quite well: in the three months preceding 31 October, the group reached a turnover of 3.048 billion pounds (3.4 billion euros). At fixed exchange rates, that makes for a 1.2 % increase. While Brico Dépôt's turnover rose by 2.4 % and Screwfix' even improved by 10.6 %, B&Q lost 2.8 % of sales and Castorama went down by 7.6 %.
Understandably, French CEO Véronique Laury feels the need to act: "We have taken the decision to exit Russia, Spain and Portugal. This will allow us to apply our strategy with more focus and efficiency in our main markets where we have, or can reach, a market leading position and create good homes by making home improvement accessible for everyone". Those main markets are France and the United Kingdom. The three countries that are left behind have only delivered 6 % of the group's turnover so far. It remains unclear whether the decision also means Kingfisher is looking for a buyer to take over its activities in those three countries, or whether the group will simply be closing these stores.
New top executive for France
"Our main challenge is Castorama France", says Laury: she stresses that a new plan of action was announced this past summer to fix the situation there. "We have accelerated our move to an everyday low price strategy and have launched a new marketing campaign to make it visible to our customers, however there is no quick fix," she adds. Kingfisher's French branch already got a new top executive in October: Christian Mazauric stepped in to replace Marc Ténart.
Meanwhile, many of Kingfisher's shareholders are getting impatient, pointing out that Laury had already announced a large-scale transformation plan back in 2016. "One Kingfisher", as the five-year plan is called, is supposed to standardise all the products that the group sells across all of its store chains. In addition, a single shared IT purchasing platform will be developed in order to save on expenses. According to the CEO the plan is moving "in the right direction", although she mentions that implementation is difficult due to the size of the changes and the difficulties the industry is facing.