DIY: the 'challenger', Kingfisher (Castorama), gets the colour back in its cheeks
After several difficult years, the Kingfisher group (Castorama and Brico Dépôt DIY stores) is returning to growth and is testing new formats. We meet its Managing Director, Alain Rabec, at the French headquarters in Templemars.
TEMPLEMARS. It is the “challenger” on the DIY market, behind Leroy Merlin, with 25% market share. Also born in the North (read below), Castorama, now part of the British group, Kingfisher, with Brico Dépôt, is returning to growth. Alain Rabec, the former Managing Director of Carrefour hypermarkets (a brand where he worked for thirty years), took over the general management of Kingfisher France in October 2019. Like the group’s new CEO, another Frenchman, Thierry Garnier. A major overhaul of the group's management after four years of losses. In the past two years, eleven stores have closed in France (including Castorama Hellemmes and Brico Dépôt Coquelles) and 789 jobs have been cut, but the return to growth is there. Kingfisher reported a 19.9% increase in revenue in the first half year (around €8.2 billion), and even a 24.4% increase in revenue in France (€2.8 billion). A review, with Alain Rabec, Managing Director, of these developments.
What happened during these two years?
“We travelled extensively around France to listen to our teams, our customers and to get back on track. With, in particular, a sales dynamic adapted to our two brands, and an enhancement of our offers”.
The health crisis has benefited all DIY retailers…
“With the health crisis, e-commerce first grew strongly. We now have drive-throughs at all our points of sale. We saw the enthusiasm for DIY speed up during the health crisis. The French wanted to decorate and adapt their homes. And that continues today, with the passion for the garden and for well-being”.
“The development of convenience is the major change for business, but it had to be tested for DIY”.
What are the future developments for the group?
“We believe in multi-format. In December 2020, we opened our first Casto Solférino convenience store in Lille. A small 500-m2 format (compared to 10,000 m2 for a traditional store) meeting local urban demand. The test is promising and we will continue it by opening two other city stores in the Paris region. The development of convenience is the major change for retail, but it had to be tested for DIY”.
How are online sales doing?
“We are also pushing multi-channel. We have improved our Castorama website with a visual product recognition tool and 3D tools to help you design your kitchen. The web currently accounts for 18% of the group's turnover. It is a little lower in France, but it is growing. We are developing home delivery. We have created “hub” stores (such as Castorama Dunkirk) that allow deliveries to customers in areas where there are fewer points of sale”.
As with hypermarkets, what is the future of large formats for DIY stores?
“The general development of distribution requires testing in order to learn. In Lormont, a few kilometres from Bordeaux, we reduced the store’s size to create a clearance area. A concept that we intend to roll out, including in the North. We have also reduced the surface area of the Gonesse store in the Île-de-France region by 2,000 m2 to improve the customer experience. Our aim is above all to listen to the customer to continue to evolve”.
Alain Rabec was interviewed by Jean-Marc Petit
Casto Solférino, Castorama’s convenience hypermarket concept, opened a year ago in Lille. A promising format, reckons Alain Rabec.
THE NORTHERN ROOTS OF "CASTOR"
- 1969: Christian Dubois opens a first warehouse store in Englos under the “Central Castor” brand, the ancestor of Castorama.
- 1977: launch of the first slogan that will remain in the collective memory for a long time: “At Casto, there’s everything you need”.
- 1984: Castorama moves its headquarters from Englos to Templemars.
- 1993: launch of the website, with 5,000 products.
- 2001: the British group, Kingfisher, becomes the majority shareholder of Castorama and Brico Dépôt.
Today, in France, Kingfisher has 21,000 employees and more than €5 billion in turnover, with 92 Castorama stores (12,536 employees) and 123 Brico Dépôt stores (9,113 employees). In the Nord and Pas-de-Calais départements, Kingfisher employs 3,400 people in 9 Castorama and 10 Brico Depot stores.
