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Summer of discontent for Kingfisher

The washout summer is likely to have taken a heavy toll on B&Q owner Kingfisher which traditionally makes 40 per cent of sales during the current quarter from outdoor activities.

The retailer, which has a chain of 359 DIY stores, has been hit hard as green-fingered shoppers shelved gardening projects in the hope that better weather was on the horizon.

But the rain continued into June and July, and analysts forecast that underlying second-quarter sales will rise just 0.7 per cent at B&Q.

But with little hope of an Indian summer, Kingfisher (up 2.60p to 268.60p) has been trying to boost trade by driving sales of showroom products such as kitchens and bathrooms, as well as taking cost-cutting initiatives.

Rod Whitehead, an analyst at Deutsche Bank, said: ‘The summer has been extremely wet across northern Europe (wettest in 100 years in the UK) which has hurt sales of garden products and will lead to heavier markdowns.

‘Investors will understandably worry whether it is just the weather. But weather does make a big difference to seasonal products, and once the second quarter is behind us the year will benefit greatly if the weather is normal.’

Rival Homebase, owned by Home Retail Group, suffered a 8.3 per cent slump in sales during the three months to June 2. The group said the wet weather was responsible for 80 per cent of the decline.

Source : Rupert Steiner – ThisIsMoney.co.uk
www.thisismoney.co.uk/money/markets/article-2173254/B-Q-owner-Kingfisher-faces-summer-discontent.html?ito=feeds-newsxml

15 July 2012
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