Effectively blaming the fact that there are too many DIY stores in Spain, the Kingfisher Group has decided to pull out of the country completely, closing all of its stores, in order to concentrate of countries where there is a better share of the market available.
What this means for the Vega Baja is that the Elche branch of Brico Depot is to close, along with 30 other stores around the country and Portugal, resulting in 1,700 workers losing their jobs.
The decision is a shock one for many, especially as in Spain, Kingfisher made a 2 million pound operating profit in the fiscal year, let down by Portugal where a 2 million pound loss was recorded. Profit in Spain in the third quarter of this year increased, albeit by 1.3%, but it’s not enough for the company which wants to “apply our strategy with greater focus and efficiency in our main markets, where we have or can reach a leadership position”, according to a spokesperson for Kingfisher.
In September, in the UK, Screwfix, another of Kingfisher’s chains and one of the UK’s fastest growing retailers, opened its 600th store, having added 100 new stores to its network in the past 18 months.
Overall, in quarter 3 of this year, Kingfisher reported 3 billion pounds in sales, from which 87 million pounds was obtained in the Iberian peninsula, although that made it third from the bottom in terms of sales with Screwfix Germany only bringing in 4 million and Kingfisher Romania just 69 million. Spain’s 0.9% increase in sales was way behind the 5.8% increase seen in Germany and the 77% increase in Romania. Top of the list of sales is the UK with almost 1.3 billion pounds worth of sales, followed by France with little over 1.1 billion. However, in the UK, B&Q alone saw a decrease of 2.8% in sales and France a drop of almost 4%.
Véronique Laury, Chief Executive Officer of Kingfisher, said, “We are committed to our plan and to building a strong business for the long-term. As part of this commitment, we have taken the decision to exit Russia, Spain and Portugal. This will allow us to apply our strategy with more focus and efficiency in our main markets where we have, or can reach, a market leading position and create good homes by making home improvement accessible for everyone.
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