Ian Cheshire, the new chief executive of B&Q-owner Kingfisher, will restructure the company’s senior management team as part of his plan to improve performance at the struggling retailer.
Mr Cheshire believes that Kingfisher, which has 780 stores in nine countries in Europe and Asia, is run too much like a decentralised conglomerate.
He will centralise the management teams and structure them around a “single unified retail group”. The restructure will lead to roles changing for senior managers, and could lead to a number leaving the company.
Mr Cheshire, who took over as chief executive earlier this year, will also target better cash returns at Kingfisher’s existing businesses and focus on improving its use of capital as part of creating a “step change” in shareholder value.
Outline details of his strategic plan came as Kingfisher reported a slowdown in fourth?quarter underlying sales. However, shareholders looking for more details of how precisely Mr Cheshire plans to increase shareholder value will have to wait until next month, when the retailer reports its full-year results.
Analysts believe that Kingfisher could demerge Castorama, its French operation, although an executive close to the company played this down.
Kingfisher said that like-for-like sales fell by 0.5pc over the 13 weeks to February 2, having been up by 1.9pc in the third quarter. However, the full?year underlying pre?tax profit forecast is in line with the current consensus of analyst expectations.
Like-for-like sales at the core B&Q chain fell by 1.7pc – a deterioration from a decrease of 0.2pc in the third quarter. Meanwhile like-for-like sales in Asia fell by 7.5pc, while sales in France rose by 1.1pc.
“Kingfisher’s international businesses, which account for more than half of group sales, continued to grow, with Castorama in France and Poland performing particularly strongly. Continuing this momentum will be our key international priority next year, along with addressing our performance in China,” said Mr Cheshire.
He said that B&Q made “good progress” in a challenging market. He also said that the chain has had the “biggest year of change in its history” due to new product lines and a new marketing strategy.
“I believe that, with the right management team clearly focused on driving higher earnings and better capital efficiency, we can improve returns and deliver a real step-change in shareholder value,” said Mr Cheshire.
Kingfisher shares in the retailer rose 3.5 to 135.5p.