B&Q owner Kingfisher announces profit fall as it eyes Bunnings' plans

B&Q owner Kingfisher has announced a profit fall ahead of rival Homebase's transformation into Bunnings.

Kingfisher had a 20.5 per cent fall in statutory pre-tax profit in the year to 31 January.

B&Q has closed 30 of 65 stores planned to shut by 2017. Homebase plans on closing 80 stores - but sources suggest the new owners want to expand store numbers again.

Kingfisher profit for 2015 was £512m, down from £644m in 2014.

Kingfisher chief executive Veronique Laury said: "There is no question that Bunnings will be a strong competitor in the UK. We are following their plans closely. We have work to do. Homebase is very different to Bunnings."

B&Q total sales increased by 1.1 per cent (+1.9 per cent LFL) to £3.799 million. Sales of outdoor seasonal products were down 0.3 per cent.

The company is working on cutting promotional activity and instead offering customers ‘Every Day Great Value’.

B&Q’s ‘Click, Pay & Collect’ is now available on over 16,700 products. Total transacted online sales, including home delivery, grew by 29 per cent.

Laury added: "This has been a very productive and important year. However, based on the solid progress so far, and the competence and enthusiasm of our colleagues, we feel very confident in our ability to deliver."

Cutting stock keeping units (SKUs) is a focus: of the 393,000 SKUs sold across the company in 2014/15, 193,000 related to non-ranged (delisted and ex-promotional) products, which do not form part of existing retail planograms. At the 2014/15 year end, there were 165,000 non-ranged SKUs representing £130 million of stock value. Dedicated teams were set up in each operating company to draw up detailed plans to clear this tail over a three year period. To date, around 50 per cent of the tail in volume terms and around 40 per cent in value terms, has been cleared with no significant impact on gross margin.

Meanwhile, a change.org petition from a B&Q management employee using the name 'Kevin Smith' has called for B&Q to re-address planned changes in employee benefits ahead of the National Living Wage coming in on 1 April.

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