By the time Sir Geoff Mulcahy was edged out of Kingfisher he had transformed the retailer’s valuation from £100 million to £5.6 billion. Mulcahy gave back £29.50 for every £1 from investors.

Five years later, Mulcahy’s successor, Gerry Murphy, departed to a chorus of catcalls and a hail of rotten tomatoes as investors suffered a reversal of fortune.

Now step forward Ian Cheshire, the latest leader of Europe’s biggest DIY retailer and charged with restoring Kingfisher’s glory. He had his first big public outing last week, when he presented full-year results and outlined future direction. So how did he do?

Cheshire made the right noises and flagged up ambitions which, if realised, should forge a better business and create value. He will change the management structure so that constituent businesses benefit more from group ownership; he will impose a “capex diet” and ensure better returns on investment.

At the heart of the enterprise will be a new retail board, responsible for ensuring group improvements in fields such as own-brand and talent management, while allowing chains to “retain responsibility for best serving their local customers”.

The recipe sounds good but, as far as the City is concerned, the proof of the pudding is in the eating. Cheshire intends to drive change through a three-year plan, but implementation of it will not begin until it is formulated and that is likely to take nearly a year.

He has plenty to work on. One of the biggest challenges is the condition of B&Q. Kingfisher loves to point out the rising group contribution made by overseas businesses. All well and good, but B&Q’s decline – not just growing international scale – lies behind that.

Analysts regard the revival of B&Q as key to Kingfisher’s renewed success. They accept market conditions are difficult just now, but hope to see retail improvements. Ultimately, Cheshire is likely to be judged on how B&Q fares.

Cheshire ran B&Q and his initiatives have borne fruit or look likely to. Revamped shops are delivering densities of£200 a sq ft, there has been more focus on product and service is being ramped up. He sees future improvements at B&Q as being at the heart of improvements to Kingfisher.

Cheshire did two important things last week: set out a vision and established a time frame. But every DIYer knows it’s doing a professional job that counts and Cheshire would surely admit he’s only just begun.


George MacDonald is deputy editor of Retail Week

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