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Wickes eyes smaller store roll out as sales edge up

Sales from home & DIY retailer Wickes’ multichannel division increased 40 per cent year-on-year in the six months to June 30th 2011, helping the company’s core sales grow 4.1 per cent compared to the same period last year.

According to an interim results statement published today by the homeware specialist’s parent firm Travis Perkins, overall delivered revenues for Wickes grew two per cent while like-for-like (LFL) trading edged up 0.3 per cent.

With consumer confidence severely knocked in recent months sales of big ticket items at retailers throughout the UK have slumped, and Wickes said today that its kitchen & bathroom sales were down 13.2 per cent year-on-year in H1.

Wickes was still able to gain market share during the period though, primarily as a result of the acquisition of 13 stores from failed competitor Focus DIY for £8 million in May. These outlets, set to open before the end of 2011, will significantly increase the retailer’s smaller format offering in key locations.

“These are providing us with the opportunity to further roll out our smaller store formats in catchment areas that previously might not have supported a larger store,” said today’s statement.

“Fit-out of the first sites has commenced and we anticipate that they will all be opened by the end of October.

“We should exit 2011 operating from at least 212 full stores, an increase of 17 since December 31st 2010.”

Travis Perkins also owns flooring specialist Tile Giant, which saw overall turnover increase by 9.3 per cent in the six-month period. LFL sales grew in the first quarter, but fell 0.6 per cent over the first half as a whole.

Operating margins in the entire retail division declined from 5.2 per cent to 3.5 per cent, and the group attributes this to “organic overhead investment mitigating market volume decline as EBIT fell by 31 per cent to £18 million”.

Including its builders’ merchanting division Travis Perkins saw group revenues rise 54 per cent year-on-year to £2.35 billion and adjusted profits before tax rise by a quarter to £140 million.

Geoff Cooper, CEO of Travis Perkins, commented: “The difficult market backdrop will continue to put pressure on weaker competitors and will lead to further consolidation in our markets, particularly in merchanting.”

Source : Ben Sillitoe - Retail Gazette

29 July 2011
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