Kingfisher tries to calm fears

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The Independent Online
Directors of Kingfisher, the beleaguered Woolworths and Comet retailer, are to visit institutional investors in an attempt to calm City nerves about the company's performance.

Kingfisher has been under mounting pressure since last week, when the group announced a disastrous trading statement which showed that profits at Woolworth would fall by a third and Comet would make a loss for the year.

Nigel Whittaker, the corporate affairs director, insisted that the meetings were routine and declined to comment further before the company's final results announcement in March. "We and our brokers keep in close touch with our shareholders at all times," he said.

Some City analysts are surprised that the board is considering institutional visits when it has not yet completed its strategy review.

Nick Hawkins, of UBS, said: "They have not really decided what they are going to do so what will they say? They will probably get shouted at." One institutional investor with a substantial holding in Kingfisher said: "We will be waiting for the figures in March. It seems too early to say what the right solution might be, but clearly something has to change."

Institutional investors have plenty to shout about, having watched the Kingfisher share price collapse over the past year, but have not so far mounted a concerted attempt to force management changes.

City analysts feel that the pressure on Sir Geoff Mulcahy, Kingfisher's chairman, Alan Smith, chief executive, and James Kerr-Muir, finance director, is likely to cost one of them their jobs. One said: "I'd be surprised if more than one of the top three is still there by the end of the year."

Kingfisher was also busily denying rumours yesterday that it had received an offer for Darty, its French electrical business, from Auchan, which controls a rival French electrical chain, Boulanger. Mr Whittaker dismissed the suggestion as "a completely ridiculous rumour". The rumour was also greeted with scepticism in the City. Nick Bubb, retail analyst with Morgan Stanley, said: "It would be like selling the crown jewels."

Another possibility is that managers of Darty, which made operating profits of £79m last year, will be brought to the UK to help restore the fortunes of Comet.

Last year, Kingfisher set up a division called Kingfisher Electrical Retail, of which Philppe Frances, the Darty president, is chief executive.