B&Q Owner To Shut 60 Stores Amid Profit Slump

The owner of B&Q has announced plans to close 60 DIY stores over the next two years.

The move comes amid a 7.5% drop in adjusted pre-tax profit of £675m for Kingfisher (LSE: KGF.L - news) , a chain that operates in the UK, Ireland (Other OTC: IRLD - news) and mainland Europe.

Releasing its figures for the full-year ending 31 January, it said total sales were also down by 1.4%, to £10.96bn.

Kingfisher told Sky News the closures would affect poor-performing stores in the UK and Ireland and added that around 600 jobs are at risk.

It expects natural attrition to account for most of the positions, with other staff being reassigned to different parts of the group, including its builders' supplies chain Screwfix.

"Kingfisher has said for some time that B&Q UK and Ireland can adequately meet local customer needs from fewer stores and that some of the store should be smaller," it said.

Overall, its UK and Ireland operations saw sales up 5.5% in the year to £4.6bn, achieving a retail profit of £276m.

More than half of the total sales for the London-listed firm come from its businesses on the Continent.

On Monday a planned £200m deal by the company to buy the French DIY chain Mr Bricolage collapsed.

The market responded positively to the development with shares in Kingfisher rising by 2%.

Shares (Berlin: DI6.BE - news) were also up more than 4% in early trading after Tuesday's announcement.

Kingfisher had been looking to strengthen its position in France, where it already owns Castorama and Brico Depot.

The closures are the first major attempt at reorganisation by Veronique Laury, who took over as CEO from Sir Ian Cheshire last September.

Ms Laury was previously the boss of Castorama.

She said the entire group would undergo a strategic shake-up, with fewer product lines, greater IT integration and executive refocus.

Two years ago B&Q saw a massive sales slump which it blamed on poor weather.