Kingfisher: The DIY giant building on back of pandemic

LONDON (AFP) – The coronavirus pandemic has caused the permanent closure of bricks-and-mortar retailers worldwide but European home-improvements giant Kingfisher is looking to expand, chief executive Thierry Garnier told AFP in an interview.

Kingfisher, along with rivals, have been allowed to keep stores open during the virus outbreak, enabling customers to purchase goods and collect online orders which have soared over the past year.

Kingfisher’s sales jumped seven per cent in 2020 to GBP12.34 billion (USD16.92 billion, EUR14.31 billion) as lockdowns saw people making improvements to their homes, the company revealed in its recent annual results statement.

Online sales ballooned 158 per cent compared with 2019, the British group added.

Garnier, 55, said Kingfisher is well placed to benefit further even after government restrictions are lifted, with office workers likely to some extent continue working
from home.

“When you spend more time at home, the house itself becomes more important so you’re going to allocate it a bigger budget,” the Frenchman said.

Kingfisher’s sales jumped seven per cent in 2020 to GBP12.34 billion as lockdowns saw people making improvements to their homes, the company said. PHOTO: AFP

“You may need to set up a proper office… so working from home is going to be positive for our sector.”

Kingfisher, which employs around 80,000 staff across Europe, plans to open smaller stores in city-centre locations.

“We will have more stores… but smaller sizes,” said Garnier, who has led Kingfisher since 2019.

Such locations will enable fast delivery of goods to customers and allow them to benefit from “click-and-collect” service, he noted.

“When you are at home tinkering and you need a part or (paint)brush, you can’t always wait eight days” for a delivery.

Kingfisher operates in eight countries, with the vast majority of its operations in the United Kingdom (UK) and Ireland where it has more than 1,000 stores under the Screwfix and B&Q brands.

Its next biggest market is France with 214 Castorama and Brico Depot outlets.

Kingfisher is based also in Poland, Portugal, Romania, Spain and Turkey – bringing its total number of stores to around 1,400.

Official data on Friday showed that British monthly retail sales jumped 2.1 per cent in February on strong demand for home improvements and garden items.

Compared with Kingfisher stores in mainland Europe, the “notable nuance in England is the importance given to the garden”, said Garnier, whose stores sell plants alongside power tools.

He noted that the pandemic has led to the emergence of a new breed of DIY enthusiasts – people under 35 years old “who have taken pleasure in the new skills acquired”.

In the United States (US), home-improvements giant Home Depot recently posted a 15-per cent jump in annual net profits to USD12.3 billion (EUR10.5 billion).

While Garnier said Brexit has not posed “any particular difficulty” for Kingfisher, competition from online giant Amazon is an issue he wants governments to address.

In a joint letter earlier this year, he joined other business leaders in calling on United Kingdom (UK) finance minister Rishi Sunak to slash taxes on commercial property.

“The tax systems in many countries have not been adapted for the Internet world and emergence of e-commerce,” Garnier told AFP.