Screwfix to open 40 new stores in the UK despite owner reporting sales slump

As it stands, there are 1,726 Screwfix stores in the UK with the brand being known for selling hardware products, trade tools and related accessories.

During the announcement, the retail group revealed that annual profits fell by more than a quarter in the last financial year.

Furthermore, Kingfisher warned another drop in earnings is expected later this year as the group struggles to reverse its fortunes in Europe.

The Screwfix owner is in the process of implementing a turnaround plan as it overhauls its French arm to improve its wider performance.

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Based on Kingfisher’s report, the group saw a 25.1 per cent drop in underlying pre-tax profits to £568million for the year to January 31.

The organisation, which owns various brands including Castorama and Brico Depot, said like-for-like sales dropped by 5.9 per cent in France and 7.7 per cent elsewhere across Europe.

However, the Screwfix owner shared that it experienced a more resilient performance in its UK and Ireland-based operations.

In the UK, sales were up by 0.8 per cent while overall group-wide sales down 3.1 per cent as a result.

According to Kingfisher, sales declines have been pared back in this new financial year to a drop of 2.3 per cent.

Despite this, the group has forecast profits will fall again to between £490million and £550million for the 2024-25 tax year which is below the £560million predicted by analysts.

To boost profits, Kingfisher announced a turnaround plan for its beleaguered French arm, including a store restructuring and shop revamp plan.

According to the group, this will assist in boosting its flagging performance in the region.

In its report, Kingfisher said it had a “clear plan to take France to the next level” and “significantly improve the performance and profitability of Castorama”.

There are plans to cut the space of some stores with a third of the 95-strong chain being pointed out due to being the lowest performing.

This is in stark contrast to the group’s plans to expand Screwfix stores substantially in the coming months.

As well as this, Kingfisher plans to expand the chain across France and open locations under the Castorama brand in Poland.

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Thierry Garnier, chief executive of Kingfisher, outlined the situation the group finds itself in.

He said: “Despite all the macroeconomic and consumer challenges in our markets over the past year, we have stayed focused on our customers and our long-term strategy.”

“In the short term, while repairs, maintenance and renovation activity on existing homes continue to support resilient demand, we are cautious on the overall market outlook for 2024 due to the lag between housing demand and home improvement demand.

“Against this backdrop we will remain agile and focused on what is within our control – leveraging our strategy to deliver market share growth, driving productivity gains, and managing our costs and cash effectively.”