Kingfisher sets its sights on the city center

Any new development, or diversification, in view of markets becoming saturatedéis a vector of growth and a generator of employment. Europeés number one DIY and home improvement retailer is also planning to expand its presence in city centers with smaller stores.
The British group is looking to renew itself in a market environment that remains difficult for the sector.

Its managing director, Ian Cheshire, told énéclaré Reuters on Monday à that Kingfisher wanted to éextend this concept of small convenience storesé already expériencedé in France and Russia, à its British chain B&Q over the next 18 months.

These new stores will rival competitors Homebase, veryèpresent in the London suburbs, or Focus DIY.

Ian Cheshire was déclaré optimistic about the recovery of the églobal economy but does not expect à strong growth in the DIY sector. "I wouldn't be at all surprised to see markets édecline légèrementally over the next two years", he saidéclaré, referring to Great Britain. According to him, the French market, where the group is present under the Castorama and Brico Dépôt banners, is doing better.

Kingfisher, which has a total of 830 stores in eight countries, embarked on a three-year écost-cutting plan a year and a half ago, involving, among other things, higher margins, more centralized purchasing and greater use of àlow-cost production centers in Asia.
Ian Cheshire was not worried by Pékinés decision to relax its foreign exchange regime, wanting toéàraise the costûof products imported from China.

He maintained that the appreciation of the yuan would be gradual and would not prevent Chinese products from êstill being much cheaperéthan products made in Europe. The group could, however, éalso look to àother low-cost àproduction countries, such as Indonesia ésia or Vietnam, he warnedécisé.

Kingfisherés managing director denied rumors of an imminent halt to the groupés currently unprofitable activities in China, estimating that around 18 months would be necessary to find the adéquate product range and complete thereafter if there was an opportunityé for à long-term growth.
Finally, he addedé that the group would continue to expand in Spain, despiteé the scale of divestment in the country. "I don't see why there shouldn't be at least 50 stores in this country," he said.

Sources Les Echos - 06/21/2010