The weather is miserable, the economy struggling, the housing market lurching along. You don’t want to go out, you don’t want to move house, so what do you do? Go out and buy some bright paint and funky wallpaper and set about decorating your home the way you want it to be.
Kingfisher, the owner of B&Q, says that stay-at home Britons fed up with their drab homes are helping to boost sales at its stores. The retailer said that DIY sales in Britain had risen, despite housing market activity remaining subdued, because homeowners had been forced to improve their houses instead of selling.
Ian Cheshire, chief executive, said: “The UK story is still DIY-led, people are still spending more time at home, so wallpaper is up, kitchens are up. That’s indicative of people trading out of specialists and into us and wanting to refresh their homes while waiting to move ... they’re using their houses as a home rather than as a financial instrument, so they’re being more adventurous and funky.”
A lime green kitchen and leopard-skin wallpaper, which is a best seller at B&Q, were held up as examples.
Profits at Kingfisher rose 28 per cent to £227 million in the three months to October 31, with UK like-for-like sales up 3.9 per cent. B&Q, boosted by “nesting” homeowners, was the star performer, with like-for-like sales up 5.7 per per cent. Screwfix, its trade division, fared less well.
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Across the group, like-for-like sales were up 0.8 per cent, with total sales, including the contribution of new stores, up 5.6 per cent at £2.69 billion.
Mr Cheshire said that the resilient performance of the UK business was repeated in its international business, which accounted for 80 per cent of group profits during the period, helped by the inclusion of peak August trading at Castorama, its French version of B&Q.
Sales in France slipped in euro terms but they rose in sterling because of the weak pound. Mr Cheshire said: “France has actually been slightly worse than the UK because we haven’t seen the interest rate stimulus effect there that we have in the UK. They don’t have variable rate mortgages, you don’t get the cash-inpocket effect that we do here.”
Mr Cheshire announced a reshuffle at its international businesses yesterday. Loic Dubois, former chief executive of Carrefour in China, will replace Matt Tyson, who is retiring. Janusz Lella is taking over the Polish operation after the retirement of Claude Acquart. Brico Depot, Kingfisher’s trade-focused French business, will be led by Alain Souillard, the former boss of Carrefour’s French hypermarkets division.
Kingfisher is desperately trying to turn around its Chinese business. Last year it announced that it would cut by a third its number of stores and reduce the size of another third. Mr Cheshire said restructuring was on course.
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The group cut its net debt to £200 million from £1 billion at the end of January, but remains cautious for 2010. Mr Cheshire said: “Looking ahead, we continue to rely on our own initiatives to drive performance ... and continue to assume no early help from improved consumer demand.”
He added that the general election next year might have “an important influence on consumer confidence”. Kingfisher shares edged up 2¼p to 238p.