B&Q seeking Irish expansion despite declining sales

THE OWNER of BQ said it was still seeking to expand the chain in Ireland, despite declining sales that dragged down the group’s overall turnover so far this year.

Kingfisher, which employs more than 750 people here, said it would open new stores in south Dublin if it could find suitable premises.

Total sales for B&Q UK and Ireland were down 3.1 per cent, or 3.7 per cent on a like-for-like basis, to £2.1 billion (€2.5 billion) in the 26 weeks to July 31st, 2010. The fall was seen in a number sectors, with sales of outdoor products declining around 1 per cent, and kitchens, bathrooms, bedrooms and building categories down about 6 per cent as the number of promotions declined.

However, group finance director of Kingfisher Kevin O’Byrne said the company was open to growth. “We are always looking at areas we could expand the business in Ireland,” he said.

Irish suppliers could also benefit from B&Q’s network of stores and its policy of finding local products to export to its UK stores. “We’re keen to be a good local citizen and also drive our sales,” Mr O’Byrne said. BQ is trialling the sale of Irish peat briquettes in some of its British stores.

The wider Kingfisher group beat first-half profit forecasts, helped by cost-cutting and business improvements that it said would help it to cope with a tough consumer outlook.

Europe’s biggest home improvement retailer, which also runs the Castorama and Brico Depot chains in France, said it made a profit before tax and one-off items of £354 million the 26 weeks to July 31st.

“The immediate outlook for consumer spending is fragile, particularly in the UK where it is likely to remain challenging,” said chief executive Ian Cheshire. “Our continued profit growth will come from our well-established self-help initiatives.”

Kingfisher, which runs over 830 stores in eight countries, reported a 1.3 per cent fall in first-half underlying sales in July, hit by a weak performance in Britain.

But gross profit margins rose 140 basis points in Britain and 100 basis points in France as the group continued a drive to cut costs and buy more products centrally, and directly, from cheaper manufacturing countries such as China.

Kingfisher kept its interim dividend at 1.925 pence a share.