Retail group Kingfisher to shut Trade Depot stores after losses in China
28 Nov 2008
Leading home improvement and DIY (do-it-yourself) retail group Kingfisher, which owns the British retailer of DIY supplies B&Q, has announced that it will close its Trade Depot stores following falling sales across the group, and heavy losses in China.
The group is now scheduling the closure of nine Trade Depot stores, just three years after opening the division. The announcement comes close on the heels of a four per cent fall in retail profits for the three month period prior to the start of November, as revenues at its Chinese business collapsed.
Retail profit in the third quarter was at £176 million, eight per cent higher than last year, though four per cent lower on a constant currency basis. Its China sales plummeted 32 per cent on a same-store basis.
Reports quoted analysts as saying that they were shocked by the £17 million quarterly loss, where the retailer has already closed four stores. The closure of Trade Depot's nine stores will come at a cost of £20 million during the current year.
Trade Depot's retail format was aimed at the building trade. It was introduced in 2005, though it failed to take off. Trade Depot units suffered losses of £5 million during the last financial year. Reports quoted a company spokesman as saying that ''as many as possible'' of Trade Depot's 230 staff would reassigned to other parts of the group.
Euan Sutherland, head of Kingfisher UK, was reported as saying that savings from the closure of Trade Depot would be invested in B&Q and Screwfix, which is the mail order and online building supplier divisions of the retailer. The company said that an eight per cent decline in sales at B&Q was on account of poor August weather, and the weakening economy.
