Kingfisher will sell Italian DIY stores
Kingfisher, parent of European DIY chains Castorama and B&Q, will sell its Castorama Italy stores for 560 million euros (US$823.4 million).
Groupe Adeo, a Lille, France-based DIY chain, will take over the 31 Castorama stores in Italy pending regulatory approval from the European Union.
The first Castorama store was opened in Italy in 1988. Last year, the division reported $53 million in earnings on sales of $573 million.
Kingfisher said it plans to use proceeds from the sale to reduce the company’s net debt.
“This sale is consistent with our aim of delivering a step-change in shareholder value and is a good deal at this point in the economic cycle,” said Ian Cheshire, Kingfisher’s group CEO. “We believe we can achieve higher incremental returns on capital elsewhere in Europe and strengthen our balance sheet by reducing our net debt.”
Adeo Group operates stores in France, Italy, Spain, Brazil, Portugal, Poland, Russia, Greece and China.
B&Q, Castorama see sales growth
Kingfisher, parent of European DIY giants B&Q and Castorama, had sales growth in the second quarter despite similar commodity and housing pressures in the European market as in the United States.
Total sales at B&Q rose 3.7 percent due to better weather and fewer markdowns, the company said. B&Q also reported greater sales of “higher margin decorative ranges” and significantly less clearance activity.
The company’s U.K.-based pro businesses, Screwfix and Trade Depot, reported sales growth of 18.7 percent, primarily due to 13 new store openings.
The company’s France-based Castorama chain saw same-store sales growth of 3.5 percent, while total sales grew 4.3 percent, with decorative ranges and outdoor product performing well. Sales at the Brico Depot chain rose 2.2 percent overall, although sales were negatively affected by lower housing starts in that country. House-brand sales rose at both chains, the company noted.
Sales in other countries were mixed: Castorama in Poland saw sales growth of 18.8 percent in what the retailer characterized as a “buoyant market.” Castorama in Italy saw total sales rise 5.1 percent in what it said was a weak consumer environment. B&Q in China saw a big sales dip, down 24.5 percent, “reflecting market weakness driven by housing regulation changes and the significant reduction in unprofitable deep discounting and special promotions.”
The company outlined several initiatives for the coming year, including expansion in France and Eastern Europe. In all, Kingfisher operates around 850 stores in nine countries in Europe and Asia.
Do it Best suppliers donate to Habitat for Humanity
More than 100 vendors that exhibited at the recent Do it Best spring market donated a combined $221,448 in new or like-new merchandise to 16 Habitat for Humanity affiliates in Indiana, Ohio, Kentucky and Michigan. Much of the donated merchandise helps stock Habitat for Humanity Re-Stores, which sell DIY products to Habitat families and funnel profits into future projects.
“Because we sell below retail, and a great deal of the donated products are still in original packaging and not just display products, we’ve been able to provide our homeowners with some great buys on quality products,” said Bob Elliott, resources coordinator for Habitat for Humanity of Morgan County (Ind.). “It has also helped our Re-Store gain greater exposure in the community and increased our regular customer base through having a more diverse product line.”
Wells Lamont Retail Group participated for the second straight year, donating approximately 1,500 pairs of gloves to the organization. “Instead of selling our gloves at the close of the market, we chose to give them to people who need them,” said John Lenart, national accounts manager.
In 2004, Fort Wayne, Ind.-based Do it Best named Habitat for Humanity its corporate cause of choice and partners with Habitat for Humanity throughout the year in many different ways and locations.