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
ebooksA special investigation by Andy McSmith
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
Arts and Entertainment
Jay Z has placed a bet on streaming being the future for music and videos
music
Arts and Entertainment
Festival-goers soak up the atmosphere at Glastonbury
music
News
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
news
  • Get to the point
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

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own