Kingfisher hit by Chinese nightmare

By DAILY MAIL REPORTER
Updated:

The huge cost of Kingfisher's ill-fated foray into China was revealed yesterday as the DIY giant announced that it is being forced to shed more than a third of its stores in the republic.

B&Q

Cutting back: B&Q will shut 22 outlets

Kingfisher, owner of 322 B&Q stores in Britain and a clutch of overseas operations, is setting aside £107million to cover the cost of sorting out the Chinese business. And it is taking a £124million write-off.

The operation lost £1million a week in the year ending January. Now, Kingfisher is to shut 22 of its 63 outlets. Of the ones that remain, 17 will be cut in size. Kingfisher's Chinese business is expected to lose money this year, perhaps £40million. But chief executive Ian Cheshire said: 'We still believe there is long-term potential in China.'

The business has been plunged into loss by a sharp downturn in China's housing market. Cheshire admitted yesterday that B&Q had become over-reliant on income from fitting out newly-built apartments.

In Britain, B&Q suffered an underlying sales fall of 6.1 per cent. Profits fell £25million to £106million.

The company has shelved its programme of expensive store refits. Instead, it is carrying out a programme of more basic revamps.

Kingfisher is closing its British Trade Depot operation, which is costing £19million.

Overall, the group's pre-tax profits collapsed by more than three-quarters to £90million. But that was after including in the impact of one-offs. Underlying profits were roughly flat at £368million.

B&Q has cut its full-year dividend to 5.32p a share from 7.25p. The shares fell 3.3p to 139p.




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