Kesa rebrands following lacklustre financial results

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Kesa Electricals has revealed a business restructure and a new focus on multichannel retailing across its European network.

Kesa’s disposal of the Comet chain meant it could focus on continental Europe

From July 31 it will be renamed Darty to reflect that “iconic” brand. Kesa hopes Darty will remain the backbone of the consumer electronics group.

The change comes on the back of a set of underwhelming full-year results. Revenue for the 12 months to April 30 fell 2%, from E5.91bn (£4.74bn) to E5.25bn (£4.21bn). This poor performance was a result of the disposal of its UK chain Comet, which it sold to OpCapita earlier in the year for £2.

With this struggling arm of the business removed, Kesa is now free to focus its efforts on its more successful continental European operations.

As part of the new structure, in terms of sales, Kesa will move away from the declining vision category and place an increased emphasis on the provision of home appliances and multimedia SKUs. Sales are not the main concern though. Over the last year, the retailer has seen improving profitability as the way forward. Already, plans to improve efficiencies in-store via its after-sales service, home delivery and at the corporate offices have been implemented.

The retailer has identified that multichannel operations are an urgent priority, particularly considering that web operations deliver “profitability higher than stores”. This year more provision will be made for consumers choosing to make purchases via mobile devices – an area in which Kesa admits its penetration is below market levels.

Parallel to the focus on the web, Kesa has made the wise decision to make its store network more compatible with the online world. The specialist is to focus on mid-sized stores that tend to be more conveniently located than larger format superstores. Kesa also confirmed underperforming stores would be closed. At its remaining locations, it is developing “differential product ranges” to reduce direct price comparison with ecommerce sites.

Underperforming store closures are essential, given the relentless rise of online shopping in consumer electronics. Kesa’s preference for mid-sized stores is one that will provide shoppers with convenient locations for multichannel transactions while allowing Kesa to maintain enough SKUs on the shopfloor to tempt customers into making spontaneous purchases.