Kingfisher among potential predators eyeing Wickes

Leading DIY retailers, including Kingfisher, are taking a close look at troubled Wickes, and might consider bids for the company once the extent of the profits overstatement scam that emerged last week is confirmed. Wickes hopes to report within two weeks.

"Of course we are taking an interest, although it is too early to expect anything dramatic," a source at Kingfisher, which owns the B&Q chain, said yesterday. Despite the problems, "Wickes are quite highly thought of, and are an excellent brand".

Another DIY industry source added: "Wickes would be a welcome addition to many companies in the sector. They have a reasonable market share, and good quality shops."

But Boots, owner of AG Stanley and Do It All, is unlikely to be interested, insiders indicated yesterday. The company has just bought the half of Do it All it did not already own from WH Smith, and has said it will seek to close as many as 60 shops. It is believed the company is not looking to expand further in the DIY sector.

Auditors are continuing their investigations this week into controversial discount schemes between suppliers and buyers at Wickes, attempting to calculate the amount by which the company's profits have been overstated in the accounts.

Insiders suggested yesterday that the cumulative overstatement since 1990 was likely to equal the company's operating profits of pounds 30.8m in 1995.

The extent of the scam has shocked some industry executives, although one said yesterday that "there had been industry rumours for some time" because of the company's ability to weather even significant downturns in the economy.

The overstatement relates principally to payments made by suppliers to secure contracts with Wickes. Common in the industry, the "golden hello" payments in Wickes' case were often payable over two or three years, even though the company accounted for them in a single year, thus inflating profits and thereby bonuses for management.

Similarly, suppliers were allowed to increase prices in subsequent years to offset cash payments earmarked for in-store promotions and other marketing schemes.

At the heart of the scam is the apparent connivance of at least some suppliers. Investigators are also trying to determine who at Wickes was directing the large-scale cover-up needed to keep auditors in the dark year after year. "We are trying to determine who knew, and when they knew it," a source close to the investigation said yesterday.

The inquiry widened late last week to include the former finance director, Trefor Llewellyn, now at building materials company Caradon. Two executives were also suspended last week, although they are helping with the investigation.

Copies of some of the secret agreements were given to Stuart Stradling, the company's current finance director, 10 days ago, prompting last week's dramatic events, including the resignation of Henry Sweetbaum, the group's chairman and chief executive, and a halving of Wickes' share price. By Tuesday, when the shares were suspended, the company was worth just pounds 260m.

Wickes has 108 shops in Britain and 40 on the Continent.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Advisor - OTE £95,000

£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Day In a Page

Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high
How to find gold: The Californian badlands, digging out crevasses and sifting sludge

How to find gold

Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

Not born in the USA

Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
10 best balsamic vinegars

10 best balsamic vinegars

Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
Wimbledon 2015: Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Serena dispatched her elder sister 6-4, 6-3 in eight minutes more than an hour
Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy