DIY retailer Kingfisher, which launched a new centralised management structure in March, has reported a difficult first quarter, ending May 3, 2008. To spur on the changed management structure the organisation has introduced a new profit sharing scheme for the top echelon.
Kingfisher, which owns the B&Q superstore chain, reported a 4.1 per cent fall in sales for the first quarter. It put these down to the early Easter in 2008 and the poor weather.
Ian Cheshire, group chief executive said the poor trading was anticipated. “Against this backdrop, we have taken vigorous action to improve margins and control costs,” he said. “In a busy first quarter, we have reworked our 2008 budgets to reduce our reliance on sales growth in what could be a challenging year, and put in place an overall plan with a clear target for the next three years.”
At the heart of the changes is a centralisation plan announced earlier this year for management and IT within the Kingfisher group. Three divisions were created in March for the British, French and international markets. Previously the Kingfisher brands, B&Q in the UK and China and Brisco in France had operated separately. A centralised IT approach was also introduced and the company has now filled all the senior management posts.
At today’s trading announcement Cheshire introduced a share based long-term incentive plan for the senior management that ties in with the shareholder returns. Cheshire’s plan awards shares to the management for achieving earnings growth for the entire company over the next three and four years.