Brico Depôt, owned by the British group, Kingfisher with stores across Spain and Portugal, has announced that it is pulling out of the Iberian market, "to focus the strategic plan in the main markets.”
A company statement, reads, "We are committed to our transformation plan and to building a solid long-term business. As part of this commitment, we have taken the difficult decision to leave Spain and Portugal, attractive markets where we have a relatively small market share, "explains the CEO of the British group, Véronique Laury.
Brico Depôt has 28 establishments in Spain, where the British group landed in 2003, and three in Portugal, where it settled in 2012. The company also announced plans to leave Russia, where it has 20 Castorama stores. 5,000 jobs are to go.
“We are operating in a difficult retail environment. We face challenges and we are addressing them,” said Laury, adding,
"I would like to thank all of our colleagues for their dedication and commitment to our customers. Stores will continue to function normally."
In its last fiscal year, Brico Depôt España achieved an operating profit of €2.2 million, while the Portuguese business recorded operating losses of €2.2 million.
"This will allow us to apply our strategy with greater focus and efficiency in our main markets where we have or can achieve a leadership position," added Laury.
Kingfisher announces the move after sales dropped by almost 3% at its DIY stores in the UK and Ireland
Kingfisher said the sales decline at B&Q was caused by the company ending bathroom and kitchen installation services.
“We are operating in a difficult retail environment. We face challenges and we are addressing them,” said Véronique Laury, the chief executive of B&Q’s owner, Kingfisher.
Moving out of Russia, Spain and Portugal, said Laury, would allow Kingfisher, “to apply our strategy with more focus and efficiency in our main markets where we have, or can reach, a market leading position”.
The company employs 3,000 people in Russia and 2,000 in Spain and Portugal but the stores will continue to trade while it seeks buyers, a process that is expected to run well into 2019.
Shares in Kingfisher fell 2% in morning trading on Wednesday after six consecutive quarters of declining sales.
Swedish multinational, IKEA announced today that it will cut about 7,500 jobs worldwide over the next few years because of "the process of transformation of the Swedish company."
However, Ingka Group, which accounts for 90% of IKEA's sales, “will create at the same time 11,500 new jobs.”
"We are going to introduce a new organisation, more adapted to satisfy our customers. To make it possible, we need to improve the way we work, direct and organise," reads a statement issued by the director of IKEA Sweden.
Although the cut will happen worldwide, the official guarantees that, "not all countries will be affected in the same way."
