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B&Q and Homebase sales hammered by bad weather B&Q and Homebase sales hammered by bad weather
(about 1 hour later)
This summer has been a DIY disaster for the UK’s two biggest home improvement chains with both reporting falling sales as they struggle with wet weather and disruption from major restructuring plans. Summer has been a DIY disaster for the UK’s two biggest home improvement chains, which have reported falling sales as they struggle with wet weather and disruption from major restructuring plans.
Kingfisher, Europe’s largest home improvement retailer, reported a 4.7% fall in sales at its established B&Q stores in the three months to the end of July.Kingfisher, Europe’s largest home improvement retailer, reported a 4.7% fall in sales at its established B&Q stores in the three months to the end of July.
Homebase, which is in the process of transforming into an outpost of the Australian Bunnings chain, revealed a 4.3% fall in sales at stores open more than a year in the three months to the end of June. Homebase, which is in the process of transforming into an outpost of the Australian chain Bunnings, said sales at stores open more than a year dropped by 4.3% in the three months to the end of June.
Total sales fell 6.8% and underlying sales at established Homebase and Bunnings stores by 4.3% as they cut prices and suffered disruption from changing their look and product ranges. Total sales fell by 6.8% and underlying sales at established Homebase and Bunnings stores declined by 4.3% as they cut prices and suffered disruption from changing their look and product ranges.
The chains, which are owned by Wesfarmers retail group, reported a loss before interest and tax of £54m after £19m of restructuring costs. Revenues were £1.2bn in the first full financial year after Wesfarmers acquired Homebase for £340m. The chains, which are owned by the retail group Wesfarmers, reported a loss before interest and tax of £54m, after £19m of restructuring costs. Revenue was £1.2bn in the first full financial year after Wesfarmers acquired Homebase for £340m.
Kingfisher, which also trades as Screwfix in Britain and Castorama and Brico Depot in France and other markets, said it remained cautious on the outlook for the second half as it continues to unify more product ranges across the group and implement new IT systems. Kingfisher, which also trades as Screwfix in Britain, and Castorama and Brico Dépôt in France and other markets, said it remained cautious on the outlook for the second half as it continues to unify more product ranges across the group and implement new IT systems.
The company’s share price slumped 5% as analysts said sales at B&Q in the UK and Ireland were worse than the 3% fall expected. Sales in France, Russia and Spain also fell back but there was strong growth at the UK’s Screwfix business where sales rose 17.2% and a 4% rise in underlying sales in Poland. The company’s share price fell by 5% as analysts said sales at B&Q in the UK and Ireland were worse than the 3% drop expected. Sales in France, Russia and Spain also declined, but there was strong growth of 17.2% at the UK’s Screwfix business, and a 4% rise in underlying sales in Poland.
B&Q suffered from poor availability on some products amid business changes, as well as a damper summer than last year which hit sales of barbecues, garden furniture and other outdoor goods. B&Q suffered from poor availability on some products, as well as a damper summer than last year, which hit sales of barbecues, garden furniture and other outdoor goods.
A warm spring also led shoppers to buy some of these items earlier than usual, hitting sales in the following quarter so that seasonal goods fell 10.7% compared to a 9.6% rise in the three months to the end of July. A warm spring also led shoppers to buy some of these items earlier than usual, hurting sales in the following quarter, with the result that seasonal goods fell by 10.7% compared with a 9.6% rise in the three months to the end of July.
Kingfisher is in the second year of a plan to boost annual profit by £500m from 2021 that will cost £800m over five years to deliver. It involves unifying product ranges across the business, improving e-commerce capabilities and driving efficiencies. Kingfisher is in the second year of a plan to increase annual profit by £500m from 2021, which will cost £800m over five years to deliver. It involves unifying product ranges across the business, improving e-commerce capabilities and finding efficiencies.
The chief executive, Véronique Laury, said that the disruption was “on an improving trend”.
“Having been very aware that this year would be challenging given the step up in transformation activity, we already have self-help plans in place to support our overall year two performance,” she said.
Chief executive Véronique Laury said that the disruption was “on an improving trend”. Wesfarmers said its performance in the UK would continue to be negatively affected by disproportionate costs and disruptions associated with store revamps until its Bunnings chain reached scale.
“Having been very aware that this year would be challenging given the step up in transformation activity, we already have self-help plans in place to support our overall year two performance,” she said. . Between 15 and 20 pilot Bunnings stores are expected to be converted from Homebase shops by the end of December.
Wesfarmers said that performance in the UK would continue to be negatively affected by disproportionate costs and disruptions associated with store revamps until its Bunnings chain reached scale.
Fifteen to 20 pilot Bunnings stores are expected to be converted from Homebase stores by the end of December.