B&Q OWNER Kingfisher said yesterday it is to scale back or exit 18 of its stores across the UK as the DIY retailer looks for ways to ease its lease burden and boost profitability.
Several retailers, including Topshop owner Arcadia, have been shedding stores as leases come up for renewal to reflect changes in consumer habits and the sharp increase in online shopping.
However, with only a small number of stores coming up for renewal, Kingfisher has been looking at more “creative” ways to use space.
Kingfisher chief executive Ian Cheshire said it had reached deals on 18 B&Q stores for supermarkets to take on some of the space, including one already completed in Kent where Asda has already taken half of the space.
This will leave the group with five per cent less space in the UK, saving £16m on rents and £7m in business rates.
“B&Q could potentially make the same amount of sales with 20 per cent less space,” Cheshire said.
His comments came as the group posted a 1.6 per cent fall in pre-tax profits to £365m in the six months to 3 August from the same time last year.
Ian Cheshire described the first half as a “tale of two quarters”, as freezing temperatures at the beginning of the year offset the benefits of the summer heatwave in the second quarter.
While the UK has seen an improved housing market and rising consumer confidence, Cheshire said it was too early to call it a recovery.
“While we’re welcoming the change in atmosphere and certainly the UK lending environment has fundamentally changed, I’m not sure we’re there yet in calling a sustained economic recovery,” Cheshire said.