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Mr Bricolage says trading improved over Summer

"Summer was good for the DIY market and there may a reversal of the (negative) trend, but I want to stay cautious," Chairman and CEO Jean-Francois Boucher told Reuters on Wednesday.

The group, which operates under the Mr.Bricolage, Les Briconautes and L'Entrepôt Du Bricolage brands, had suffered along with other European retailers as cash-strapped customers held off buying "big ticket" items like kitchens and bathrooms.

Yet France emerged from recession with faster-than-expected growth of 0.5 percent in the second quarter, while consumer confidence and import figures last week signaled demand in the 2 trillion euro economy is gathering momentum, although from low levels.

"The DIY market rose 4 percent in July and we did better than the market," Boucher added. "August was positive for us and September is on a positive trend."

Summer is a crucial period for Mr Bricolage, which makes around 30 percent of its annual sales from July through September, and the company said this year's good summer weather had boosted purchases of gardening equipment and lifted consumer morale.

Yet the consumer spending situation remained "tense" and the property market was still "not great", Boucher said.

Mr Bricolage shares, which have gained 5 percent since the start of the year to give it a stock market value of 104 million euros, edged up 0.5 percent to 10.00 euros by 1213 GMT.

The stock trades on 8.5 times forecast 2013 earnings against 15.4 times for UK-based Kingfisher Plc (>> Kingfisher plc), whose French business comprises Castorama and Brico Depot, Thomson Reuters data shows.

Boucher added he was betting on e-commerce for future growth, seeing online making up 3 percent of group sales within two to three years, up from 0.5 percent.

"We are convinced that there is an online market to tap. I believe that shopping behaviors are changing and the young generations who are arriving on the property market will have shopping behaviors tied to online," Boucher said.

Overall the group is aiming for a turnover of 2.5 billion euros by 2015 against 2.3 billion last year.

Boucher's comments came after the group reported a 47 percent drop in first-half operating profit to 8.9 million euros ($11.8 million), hit by charges tied to the restructuring of its integrated stores.

By contrast Kingfisher on Wednesday reported a slight dip in underlying pretax profit to 365 million pounds ($573.8 million) and said it was too early to talk of an economic recovery in Britain, though it was encouraged by recent data pointing to an upturn.

Mr Bricolage, which ranks as France's third-largest home-improvement group by sales after Adeo, owner the Leroy Merlin stores, and Kingfisher, commands a 12 percent share of a French market worth 20 billion euros, against over 60 percent for Adeo and Kingfisher combined.

The company blamed bad weather earlier this year, which hit store visits and building projects, along with weak consumer sentiment, for a 4.5 percent decline in sales for the French DIY market as a whole in the first half of 2013.

It said it had outperformed the market with a 3.6 percent sales decline during the period.

Source: 4-traders

12 September 2013
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