Kingfisher strategy fails to impress

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Kingfisher, the bedraggled Woolworths to Comet group, which has agreed handsome compensation packages for four directors sacked after a disastrous profits warning in January, attempted to put its chequered past behind it yesterday with an interim strategy intended to buy the group time until a more thorough review is conducted.

The plans outlined by Sir Geoff Mulcahy, chief executive, were immediately scorned by analysts and institutional investors as little more than a retread of old ideas.

John Richards of NatWest Securities said: "I think it is being flattering to describe this announcement as a strategy. At this stage they are admitting what went wrong."

Sir Nigel Mobbs, acting non-executive chairman, defended the company's £3m pay-offs to the four sacked directors and denied they were "rewards for failure".

The boldest move announced yesterday was a plan to return Comet, the electrical business which lost £2m last year, to a more price-conscious format that relies on heavy advertising and one-off promotions. Sir Geoff also said that Trafalgar House's bid for Northern Electric could be helpful if it caused a shake-out in the market. "It could be the best thing that has happened to electrical retailing," he said. "Economic realities are beginning to take over."

At Woolworths, where profits slumped by a third to £51.4m last year after a stock problems at Christmas and problems with the new till systems, the 780 stores will be divided into three groups according to size and the product offer adapted to each.

A new Christmas Development Manager has been appointed to ensure that the stock problems of the last two Christmas periods do to not recur. Prices will be keener and store layouts devoted to growth categories such as compact discs and videos, childwear and kitchenware.

The new strategy overshadowed widely trailed results which saw pre- tax profits fall by 9 per cent to £281.5m, excluding exceptional times of £37m. Sales increased by 9 per cent to £4.88bn.