Wickes confident despite sales drop

Core product sales at DIY retailer Wickes were 3.3 per cent down on a like-for-like basis during the six months to June 30th, contributing to a 0.5 per cent reduction in overall turnover.

Sales of kitchens and bathrooms, especially in the first quarter of the year, were strong, with like-for-like turnover up 11.6 per cent on the back of an effective advertising campaign and the introduction of new ranges.

The business’s parent company Travis Perkins said that the group, which also owns Tile Giant and ToolStation, performed ahead of its expectations in the first half of the year with both merchanting and retail divisions increasing their market share and helping push up pre-tax profits at the group to £122 million.

Wickes itself opened three new stores during the period and overall revenues grew by 1.7 per cent, while there are an additional two shops scheduled to join the chain in the coming months, which has fuelled a feeling of optimism.

Chief Executive of Wickes Geoff Cooper said: “We remain determined to further develop our customer propositions via an exciting programme of organic growth initiatives with the aim of stretching our lead over competitors.

“While we continue to see modest market growth following a severe recession, we view the future with confidence.”

One problem companies like Wickes may face in the months ahead is dwindling sales of kitchens and bathrooms. Consumers’ interest in big ticket items like these has dropped as the year has moved on, with B&Q also noting similar sales trends.

Earlier this month, the Kingfisher-owned DIY retailer said that a lack of customer interest in making major purchases was a key reason for its like-for-like trading dip.

The 0.8 per cent fall in sales for the ten weeks to July 10th was still an improvement on the 1.8 per cent decline recorded in the first quarter of the year

Source : Ben Sillitoe - Retail moves.com