Kingfisher shares slump on B&Q weak trading despite warn summer
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Version 0 of 1. B&Q emerged today as the big loser of the summer as the UK’s largest DIY chain admitted it failed to capitalise on the recent heatwave, causing the City to abandon parent company Kingfisher Shares in the retail giant slumped nearly 8 per cent after sales of outdoor and seasonal products at B&Q fell 8 per cent over the second quarter, despite one of the warmest summers on record. Overall sales at the chain dropped 3.2 per cent in the 10 weeks to July 12, with big-ticket sales of kitchens, bathrooms and bedrooms diving 6 per cent. The company blamed the World Cup, suggesting homeowners were preferring to put their feet up to watch the football rather than embark on big home projects. In addition, hundreds of England-related goods, such as St George-adorned garden gnomes, were left unsold following the team’s early exit. However, the warm weather recently helped rival DIY chain Homebase record an impressive 7.9 per cent boost in sales for the three months to the end of May. Meanwhile, rival kitchens business Howden added to B&Q’s misery today by revealing it saw a 14 per cent boost in total sales in the four weeks to June 14, suggesting families were still willing to splash out on big purchases. Investors reacted by pushing Kingfisher to the bottom of the FTSE 100, with shares diving 7.9 per cent to 309.6p, their lowest in over a year. Kingfisher boss Sir Ian Cheshire claimed the fall was mainly due to good weather in the first quarter of the year, meaning many shoppers bought a new set of outdoor seats earlier than previously. He said: “Trading in our second quarter was always expected to be more difficult, annualising a very strong second-quarter performance last year and following this year’s weather-boosted first quarter.” Analysts suggested that because B&Q is more focused on consumer business than trade business, this could have affected sales, pointing out Kingfisher’s other UK business, Screwfix, which deals mainly with trade customers, has gone from strength to strength, with sales up 11.8 per cent Independent retail analyst Nick Bubb said: “Life is good for Howden, and the business goes from strength to strength, but its focus is on ‘the trade’, whereas Kingfisher is more consumer-facing and they don’t seem quite so happy about life.” Overall, Kingfisher’s sales fell 1.8 per cent with its French operation badly hit. Sales at the Castorama chain fell 0.9 per cent while Brico Depot sales dived 3.8 per cent. |