Euro Zone Crisis Seen as Opportunity by One CEO
Problems in the euro zone could offer an opportunity for UK listed DIY giant Kingfisher, its CEO, Ian Cheshire, told CNBC Thursday.
Following the release of forecast-beating first-half profits, Cheshire said his firm’s strong balance sheet gave it the option to be aggressive.
“The market could favor a firm on the front foot looking to expand,” said theKingfisher CEO in a CNBC first interview.
The French market, where Kingfisher operates the Castorama and Brico Depot stores, had a strong quarter as sales and profits both rose despite uncertainty over the euro zone crisis.
Profit margins where helped by buying more goods centrally, which where then rebranded as own-brand and sold at Kingfisher's operations in France, the UK and Poland.
The UK had a difficult quarter as poor weather and the collapse of a smaller rival saw clearance sales distort the market. Cheshire took advantage of the collapse of rival Focus by snapping up 29 stores in areas where one of its own B&Q stores does not have a presence, according to Cheshire, who is investing 130 million pounds ($204 million) in his domestic market and looking to hire 1,200 people.
Chinese sales fell by 7.7 percent but Cheshire believes the long-term story remains strong.
“Overall growth in China is very strong but the housing market is very volatile due to the government’s attempts to curb inflation,” said Cheshire.
First-half profits at Kingfisher came in at 439 million pounds versus a Reuters forecast of 409 million pounds.