Kingfisher's £500M makeover ran aground: exits from Russia, Spain, Portugal

On 21 November 2018, Kingfisher — Europe's second-largest home-improvement retailer, whose main businesses are B&Q and Screwfix in Britain and Ireland and Castorama and Brico Depot in France — reported weak quarterly sales and said it would pull out of Russia, Spain and Portugal. Shares fell as much as 5.8%, taking losses for the year to more than 30%.

The group was in the third year of a five-year programme to raise annual profit by £500 million from 2021. Instead, profits were forecast to go backwards in its 2018–2019 year. Like-for-like sales fell 1.3% in the quarter to October 31st, reflecting a 7.3% like-for-like slump at Castorama France — far worse than analysts' expectations of a fall of about 3% — while Britain and Ireland slipped 0.7%.

Chief executive Véronique Laury, who had cut Castorama's prices and revamped its marketing, warned 'there is no quick fix' for the French business, leaving the market to question how the promised profit increase would ever arrive.

France, the group's largest market, was deteriorating faster than anyone priced, dragging the whole transformation case down.

Price cuts and marketing revamps at Castorama failed to stem a slide that was twice as deep as expected.

Exits from Russia, Spain and Portugal amounted to admitting the international footprint would never deliver scale.

By year three of five, the programme was delivering backwards results, inviting doubt about the £500 million target itself.

A five-year transformation needs visible wins by year three: when the flagship market slumps and the group starts retreating from countries, the market stops pricing the promised pay-off.

The retreat from the three markets began while the French turnaround remained unresolved; the source reports no recovery metrics. The stock's year-to-date loss stood beyond 30% after the announcement.