Kingfisher, the group’s parent company, yesterday confirmed it plans to shut approximately one in six of its stores but could not confirm the details of which outlets would be affected.
Kevin O’Byrne, head of B&Q UK and Ireland, will also step down as part of the restructuring process.
About 60 out of 360 outlets will shut over the next two years, resulting in a charge of £350m (€484m), said the London-based company in a statement yesterday.
Kingfisher also announced the installation of a new global leadership team as new CEO Veronique Laury puts her stamp on Europe’s biggest DIY business.
B&Q is shrinking its store base as more shoppers buy online, a shift that led rival Homebase to announce in October that it planned to shut about a quarter of its outlets by the end of 2018.
The changing shape of the industry is among the challenges facing Laury, who became chief executive in December.
“The new CEO is taking aggressive action” in the UK, said Jamie Merriman, an analyst at Sanford C Bernstein. “The number of store closures is above expectations.”
Kingfisher rose as much as 5.1% in London trading, the most in about a year. The stock was up 4.6% at 381.5p yesterday extending this year’s gain to 12%.
Investors also welcomed an announcement that further returns of capital are possible after the collapse this week of the proposed acquisition of French chain Mr Bricolage.
“There is no incentive for us to have excess capital on the balance sheet,” said chief financial officer Karen Witts. Kingfisher plans to return £200m in its 2016 financial year, matching this year’s payout.
In addition to the 60 stores B&Q will close, Kingfisher said it will “right-size” a further six locations and shut a “small number” of unprofitable stores in Europe.
The retailer’s plans also include selling or sub-letting vacant space.
Laury is creating an eight-person leadership team that will manage operations by size and type of store, rather than brand name. In addition to B&Q, Kingfisher owns the Castorama and Brico Depot chains in France.
Bloomberg with additional reporting from Irish Examiner