The problem is that, to add to wider credit crunch and consumer slowdown woes, the weather this weekend is forecast to be more like December than spring. And wind, rain and sleet would be an appropriate, if unwelcome, backdrop for conditions afflicting the home enhancement giants such as Kingfisher’s B&Q chain and Home Retail’s Homebase.
The shape of things was evident in last week’s update from Home Retail, which revealed that Homebase like-for-likes slid 5.3 per cent in the eight weeks to the start of March. Believe it or not, that was better than some analysts feared.
Home Retail chief executive Terry Duddy warned that the tough trading environment would restrict comparable store sales growth. Over at Paddington Basin, where Ian Cheshire is settling into his new role as Kingfisher chief executive, Duddy’s caution would no doubt have been echoed.
Next Thursday, Cheshire will present Kingfisher’s prelims for the first time in the new job. If Easter plays out as expected, the weather won’t have done Cheshire any favours. But really, that won’t be what matters. The impact of weather and the wider economic environment is understood by analysts. Attention is likely to be on prospects and anything he says about changes proposed under his leadership.
It was notable that, despite Homebase’s poor sales, gross margin was up. That was typical of the tightly managed ship that is Duddy’s Home Retail Group.
There’s no onus on Cheshire to mirror the Home Retail way of doing things. The dynamics of B&Q and Kingfisher generally are different in many ways from Homebase. What investors will be keen to see is evidence that Cheshire’s management is likely to be as deft as Duddy’s at Home Retail. The bigger Kingfisher picture will not become clear next Thursday, but Cheshire’s first outing will be vital in setting the tone.
Multichannel is no cure-all
From all the hype about multichannel, you’d think being in home shopping these days was a licence to print money.
A glance at Flying Brands’ latest results shows what nonsense that is. The weaknesses admitted – its need for better service, better product, a strengthened brand – are the nuts and bolts of successful retail full stop. Will Flying Brands get these right under its own steam or might shareholder Sir Tom Hunter bid for control?
George MacDonald is deputy editor of Retail Week
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