Kingfisher, the owner of B&Q, today posted a 23% fall in first-half profits and said UK market conditions remained weak in the second half.
As it grapples with what it said were the toughest markets for many years, Kingfisher will take a £200m one-off charge in the second half as it revamps B&Q, closes 22 stores and shrinks 16 others.
Adjusted pre-tax profits at Europe's top home improvements group, which also trades as Screwfix Direct in the UK and Brico Depot in France, fell to £254.3m. Total retail sales at Kingfisher, which is also market leader in Poland, China and Taiwan, were 3.3% higher at £4.079 billion.
But like-for-like sales at B&Q - which accounts for about half of group sales, fell 7%, with the total UK same-store figure down 6.4%. French like-for-like turnover rose 1%, with the main Castorama unit showing a 3.2% same-store decline.
'It has been a challenging period for Kingfisher. Difficult trading conditions in the UK and France had a clear impact on the first-half trading performance,' the company said in a statement.
Rising energy costs, higher tax and pension contributions, increasing household debt and a weak housing market all took their toll on consumer confidence in the UK, it said.
In response, the company said that B&Q would spend £200m on revamping and driving higher sales from existing stores, cutting operating costs and closing 22 stores in areas that already have access to other B&Q outlets.
Some 16 'Warehouse' stores will be cut back in size, with the released space offered to other retailers. This would mean a reduction of about 7% in total selling space, it said.
But in France, too, the home improvements market had grown at its slowest rate in eight years, with rising unemployment leading to a softening in demand, and increasing competition and price deflation hitting same-store sales.