Kingfisher is taking a £200m hit to overhaul B&Q, its flagship do-it-yourself arm that is struggling to cope with a sharp drop in sales, by closing 22 stores and cutting jobs.
The group set out its vision for B&Q, which includes lowering prices and wooing more female shoppers, alongside poor interim results that prompted analysts to slash their profits forecasts yet again.
Shares in the group slumped 4 per cent to 235.5p on concern that trading at B&Q worsened in August. Like-for-like sales at B&Q, which dived 7 per cent in the first half, are thought to be have fallen by more than 10 per cent in August.
For the first time, Gerry Murphy, the chief executive, blamed the sales fall on the recent collapse in the housing market, which has compounded the difficulty of "dealing with a consumer who is challenged". He admitted that without the stimulus of moving house, consumers had fewer reasons to visit B&Q.
He added: "People are less confident about borrowing to support consumption. I don't think we'll see confidence begin to recover until people have a reason to believe the value of their assets is safe."
Analysts at Citigroup, who have already cut this year's forecast by 39 per cent in the past nine months, said consensus forecasts were likely to drop by a further 14 per cent to £470m. That is almost one-third less than Kingfisher made in profits last year.
As well as shutting 22 B&Q stores, Kingfisher is making 16 of its bigger stores smaller, cutting its trading space by 7 per cent. It hopes to transfer most of the 1,250 employees affected to nearby stores, but has made a provision to cover any redundancy cheques. Just £50m of the £200m restructuring charge is non-cash. It expects the drive to save £30m a year and pay for itself within five years.
Ian Cheshire, who replaced Rob Cissell as head of B&Q in June, said: "It's not the end of the world for B&Q but it is a significant tidying up of the tail."
He wants to make B&Q more female friendly by providing the type of furnishings that have worked so well for its closest rival, GUS's Homebase.
The new-look B&Q, which is to drop its long-standing "you can do it" slogan in its autumn advertising push, will showcase more Ikea-style room sets to try to inspire consumers to buy more than the nuts and bolts.
B&Q's retail profits fell 34 per cent to £144.1m in the six months to 30 July after its retail profit margin collapsed to 6.9 per cent from 10.2 per cent. It got less money from suppliers in the form of rebates because sales were weaker than anticipated. Weak trading added £130m to its net debt, which climbed 25 per cent to £1bn.
B&Q's revival plan centres on more aggressive marketing, more promotions - starting with a 10 per cent off everything weekend - and the return of its discount for the over 60s, which it recently axed.
Elsewhere, its French businesses, Castorama and Brico Dépôt, battled against the weakest DIY market for eight years. French retail profits were flat at £102m on sales up 7 per cent at £1.38bn. In Asia, its Chinese business reported profits of £800,000. Group pre-tax profits fell 13 per cent to £250.8m, or 23 per cent before exceptionals to £254.3m, on sales up 3.3 per cent at £4bn.Reuse content