Tsk, you don't get it.
You have to double your cost structure via costly business rate retail premises, you watch the share price go down the toilet, then to demonstrate your true faith in the company you buy shares, the City demand change which is essentially cost cutting by reduction in headcount & retail outlets not meeting headline targets of area managers, you have a kitchen sink quarter with an extraordinary writedown and reduce costs, at which point the share price rises & insiders unload.
More seriously, I have a horrible feeling that Kingfisher is operating B&Q & Screwfix as competitors.
Screwfix do not know whether to be trade or retail. Being trade only inherently limits your growth capability & trade declines in a recession. Conversely DIY provides much higher footfall growth potential & DIY rises in a recession as peoples cost appetite changes from "move" to "refurb". Trade tends to require credit if the job is staged payment, but many wholesalers got shafted by over extending credit lines & allowing delinquences to rise. DIY conversely doesn't involve credit, which can smooth a troubled credit exposure - alternatively offering credit can dilute credit exposure re ratios.
B&Q similarly trying trade is ridiculous. It only a little more footfall compared to the mostly retail customer base, but in doing so they end up with overlapping markets, overlapping brands and overlapping customer base to poach customers by price competition from another income statement. It is worse than the Chrysler-Mercedes tie up which rather than reduce per vehicle cost simply reduced per vehicle quality & per vehicle profit.
Amusingly I suspect marketing are running the two companies in competition, setting bonus rates on growth, and congratulating themselves on their achievement whilst the consolidated income statement gets shafted. Sort of like idiot social services with a dead baby saying "look at the charts, we have met all our targets". Or NHS management, I remember the introduction of Kaplans Balanced Scorecard
- the problem was management were too dumb to fill in what to measure and got it wrong, a whole pile of "fieldbooks" & "consultancy" were required, then they merely wrote it based around commission rather than strategic objectives. Like GPs given bonuses for checking the patient isn't dead (quite yet).
DIY may keep them both afloat, but personally I see two huge business rate costs & two overlapping brands to the extent that some are physically back-to-back. It looks like a merger which has yet to have "we'll eliminate any with geographical overlap". I am not sure having both will help volume sufficiently to reduce costs, although that may explain why a lot of the specialist screwfix range has begun to vanish as someone takes the knife to inventory cost and tries to pool buying.
Two brands under the same company can work and were used in the 1990s in IT retailing, the problem eventually becomes one of overlap and they basically compete for the same customer driving up customer acquisition costs without revenue. It's not that you know 40 ways to make love, it's that you know which one the customer wants. Hard for a "hardware store" to lose focus, but it could lose product mix & price. Focus did a brilliant job on the former, and Homebase seems to believe M&S pricing on some remarkably crap products in a huge warehouse works.