Kingfisher plc is one of Europe's largest non-food retail groups. It operates principally through its retail subsidiaries, B&Q, Comet, Darty, Superdrug and Woolworths, and its property arm, Chartwell Land. Kingfisher employs directly over 82,000 people.
The Group was founded in November 1982 following the Paternoster take-over of the UK interests of FW Woolworth (US) for £300 million. The Group was known as Woolworth Holdings until 1989 when it changed its name to Kingfisher.
For the year 1996/97 Kingfisher reported an increase in sales of 10.1% to £5,814.8m. All of the Group's main businesses had increased sales and improved their shares of their key markets. They also all reported profit growth resulting in profit before exceptional items and tax being increased by over 35% to £390.2m.
Kingfisher is committed to delivering consistent and superior returns to shareholders by being one of Europe's most profitable volume retailers.
The Group's strategy is to achieve this by developing a portfolio of strong retail brands with leading positions in attractive mass markets, well motivated employees and good supplier relationships.
The growth of each of the Kingfisher businesses is driven by a common commitment to understand and meet changing customer needs more effectively than competitors.
B&Q is the outright market leader and one of Europe's leading DIY and garden multiple retailers through its Supercentre and Warehouse stores. It employs some 18,800 people in 280 stores. Product lines cover just about everything the amateur or trade professional needs for home and garden care. Sales in 1996/97 grew by 14.1%, and profits by 75.5%.
Comet, with some 224 stores, is the UK's original out-of-town electrical retailer and now employs 6,480 people. In 1996/97 Comet reported a year-end profit of £20.2m. Comet aims to offer customers the widest range of electrical products at unbeatable prices. It has recently re-affirmed its commitment to ensuring customers 'can't buy better'.
Darty is the leading specialist electrical retailer in France with over 150 stores. Darty prides itself on its exceptional customer service - before, during and after sales -, dominant product ranges, unbeatable prices and well located stores. Darty joined the Kingfisher Group in June 1993 and its profits in 1996/97 were £113.3m.
Superdrug is now established as the number two UK personal health and beauty retailer. Its offer combines quality with exceptional value for money in both branded and own label products. Its repositioning in health and beauty has resulted in steady progress for Superdrug, which reported a profit increase of 3.2% to £42.4m for the 1996/97 year.
Woolworths is the high street chain for consumers' everyday shopping needs. It focuses on key merchandise areas such as kidswear and toys, home entertainment, confectionery, and items for the garden and home, including gifts and stationery. More recently the company has expanded into new markets such as newspapers and magazines, lottery tickets and snack foods. It employs over 31,300 staff and operates from 781 stores. For 1996/97 Woolworths delivered a 28.8% profit improvement to £84.1m.
Chartwell Land is one of the UK's largest specialist retail property companies. It actively manages a £837m property portfolio and undertakes a significant retail development programme either for sale or retention in the investment portfolio.
Entertainment UK is one of the country's largest wholesale home entertainment buyers and distributors, supplying compact discs, cassettes, singles, pre-recorded videos and computer games to the nation's best-known stores.
The Music and Video Club (MVC) was launched in January 1993 and now has over 40 stores. Customers who join the club can rent videos and buy music and videos at special membership prices. MVC's stores provide a much wider range of recorded music than is currently available in most high street music shops, appealing to a wide audience.
Two and a half years ago the Group explicitly devolved responsibility for operating performance to the separate businesses. Since that time, work has been ongoing to find and maintain a method of monitoring the business overall which allows Kingfisher plc to fulfil its duties to its shareholders while providing adequate space for the operating businesses to be responsible for their performance. Such a method needs to report on and monitor all aspects of progress towards strategic goals.
A number of techniques have been developed, for example: a new incentive scheme based on shareholder value and economic profit. We have agreed shared strategic agendas, couched in terms of balanced scorecard objectives and measures with most of the companies. However, further work is required to ensure that a coherent and effective framework is in place for all companies, whether based in the UK or elsewhere, and then to continue to evolve the framework and its content as we learn more and as the business environment changes.
We are working in particular with the Kaplan and Norton balanced scorecard model but we are happy to use any techniques that generate broader business thinking. We need to persuade diverse communities of the benefits of this aim and these communities diverge in terms of culture, nationality, disciplines, etc. We are keen to see the high level agendas, agreed with the operating business boards, cascaded further into the businesses.