Kingfisher spreads Continental wings
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Kingfisher, the retail group whose French subsidiary has been one of its few recent successes, is expanding further into the French electricals market. It is paying pounds 59m for a 20 per cent stake in But, the country's fourth-largest electrical retailer.
The group is conducting the deal through Darty, the French electricals retailer it acquired in 1993. Darty accounted for almost half of Kingfisher's profits in the six months to July. It is widely considered to have been the group's salvation when many of its other chains such as Woolworths, Comet and B&Q have experienced problems.
The company said: "Darty was a good acquisition and we wanted to build on that." Retail analysts said the deal seemed a good, safe move. However, one described the deal as "totally bemusing". "It would have been better to seek new opportunities than simply reinforcing existing territory," he said. Kingfisher shares fell 16p to 528p.
But has 232 out-of-town stores and specialises in electrical goods and furniture sold to younger buyers who are looking for lower prices. All but 37 of the stores are franchises, although the company is looking to buy back many of the franchises.
But has 5.1 per cent of the French electrical market, thought to be less cut-throat than the UK market which has seen a flurry of high-level casualties.
As Darty is the market leader, with more than 12 per cent, Kingfisher will control 18 per cent of the market. But is also France's second-largest furniture retailer, with a share of 7.7 per cent.
Last year But achieved profits of pounds 10m on sales of pounds 104m at its directly- owned outlets. Profits from the franchises were pounds 24m on sales of pounds 199m.
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