Outlook: Kingfisher

IT WAS all change at Kingfisher's final results presentation yesterday as the company sought to underline its position as a true pan-European retailer. Forgetting that his is a largely British company whose shares are almost exclusively held in London, Sir Geoff Mulcahy chose to go to Paris instead to brief the French financial community on his profits. This led to a technological extravaganza of epic proportions, complete with video links, simultaneous translation and 150 special headsets for the analysts back in the City.

Sir Geoff, who can apparently speak quite passable French, went all shy and could only manage "bonjour" before launching straight into English. Then the translator had to be replaced half way through after "having a bit of trouble with some of the financials." Depreciation? Qu'est-ce que c'est? Goodwill and intangible assets? Ooh la la.

Still, the underlying message was clear. Kingfisher has nailed its colours to the mast as a European force and is some way ahead of most of its UK rivals in this regard. More than 40 per cent of its sales are now outside Britain. And with Darty electricals of France and now Castorama DIY also part of the stable, Kingfisher is a continental force. When you add the Wegert electricals businesses in Germany, BUT electricals and furniture in France, and the Nomi DIY operation in Poland, it looks even more impressive.

The thinking behind this strategy seems fair enough. With lower inflation and the euro affecting pricing power, the buying muscle that comes from scale may be all. If Kingfisher can successfully integrate Castorama and B&Q, it will also be able to establish a low-cost barrier to entry and protect its European market from American invaders.

So far this has worked in DIY in Britain, where the launch of the B&Q Warehouse format has held the US Home Depot invasion at bay. So perhaps Sir Geoff's new idea - an expanded Woolworths called Big W - is really a protection policy against the long-rumoured UK debut of another US giant, the mighty Wal-Mart. It is, you might say, a case of Do it Yourself before it is done unto you.

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