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Interview with Ian Cheshire (Part 2)

He uses a French word – métier, meaning job or vocation – to describe what was lacking: an understanding of what essentially the company was about. “We’re in fundamentally the same business round the world, which old Kingfisher probably couldn’t have done because it had electronics [the Comet chain] and Woolworths and all the rest of it. I learnt an awful lot of what to do and what not to do over 12 years, and came in with a reasonably well developed to-do list.”

Two French businesses, Castorama and Brico (more specialist DIY), are now much more closely co-ordinated, as are the UK businesses B&Q and Screwfix. “We’ve completely changed the dynamic there, which everyone now is used to but at the time it was like internecine warfare or dysfunctional sibling rivalry.”

There are obvious gains to be had in terms of efficient sourcing. “If you can put a £4bn business together with a £2bn business, the buying power is significantly different,” he says. “We have extracted a huge chunk of money already in the first year to 18 months. Out of just saying: ‘You know what, on products, fairly mundane stuff like a radiator, a cable for example, copper wire, this stuff is not mission critical. It’s not brand sensitive ... Can we all buy it really cheaply, please, and let’s put the volumes together.’

Although softly spoken and mild-mannered, Mr Cheshire is providing quite radical leadership. With his customers under financial pressure – recent second-quarter results in the UK were disappointing – he sees innovation as vital. “We’re in an industry that I think is in some danger of being somewhat boring,” he says. He has appointed the company’s first group innovation director, “not to sit in an ivory tower in Paddington and say ‘I’ve had a brilliant thought, you guys go and do this’, but to say: ‘Look, there’s lots of ideas, from suppliers, from our own people or others, who’ve got new ways of looking at things. How do we create a funnel of those?’ And it’s not just products, it’s also how might we do things differently.”

Mr Cheshire also wants to see innovation in business formats. Best Buy’s “geek squad” is well worth imitating in the DIY context, he feels. Offering advice on environmental refurbishment of homes could be another big money maker. It doesn’t stop there. “There are projects involved in selling whole kit houses, which we’re testing at the moment in France,” he says.

At the end of June, the company’s top 250 managers met in Barcelona to reinforce the “one company” ethos and consider further business innovations.

Kingfisher now trades in eight countries – as well as the UK and France there is Ireland, Poland, Spain, Russia, Turkey and China. But it is this last market, with all its potential, that has given Mr Cheshire his biggest headache in the job so far.

Source : Andrea Felsted/Stefan Stern - FT.com

05 September 2010
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Insight provides a host of information I need on many of our company’s largest customers. I use this information regularly with my team, both at a local level as well as with our other international operations. It’s extremely useful when sharing market intelligence information with our corporate office.

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Paul Boyce - European CEO, QEP Ltd.
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