At its annual meeting yesterday, Boots' chairman, Sir Michael Angus, told shareholders that the loss-making Do It All chain saw like-for-like sales fall by 6.6 per cent between April and June, a performance at the lowest end of City expectations.
Boots said comparative sales at its AG Stanley paint and wallpaper businesseses, which trade under the Fads and Homestyle names, fell by more than 11 per cent.
Ray Bowden of Robert Fleming described the performance as "dreadful". He added: "Boots is running up a down escalator in the DIY market."
Do It All made a loss of pounds 6.3m last year while AG Stanley lost pounds 8.5m. Sir Michael said: "It's going to be a long hard slog to get these businesses into profit
The figures on current trading show that, far from catching up with rivals such as B&Q and Sainsbury's Homebase, Do It All is losing ground. Though Kingfisher admitted B&Q faced tough market conditions, it reported like- for-like sales up 3.2 per cent in the 13 weeks since the end of April. Sainsbury, which took over the Texas Homecare chain earlier this year, said last month that Texas would make a small loss at the half year stage but it expected the stores to return a small profit over the full year.
Boots has been subjecting Do It All to radical surgery as it tries to restore the group to profit. Earlier this year it said it would be reducing the number of branches from 210 to 143. It has been refurbishing stores under a programme called Project Focus. Boots says sales at these stores are more encouraging.
The DIY businesses marred otherwise promising news on trading from Boots. The core business, Boots the Chemist, rose by nearly 5 per cent in the three months to June. Halfords also put on sales.
Boots again asked shareholders for permission to buy back shares if necessary after last year's pounds 500m buy-back. The group still has net cash of more than pounds 500m.
The performance of the Ward White acquisitions, which includes Halfords and Stanley, was criticised by some shareholders. One asked. "Has anyone responsible for this been penalised?" There were also criticisms over the share of Boots' sale of its pharmaceuticals business to BASF for pounds 840m.Reuse content