OPINION - Santa delivered early for canny Kingfisher chief

Don’t be surprised if you spy a few UK retailers lining up to see what Santa Claus has got for them in his sack.

Don’t be surprised if you spy a few UK retailers lining up to see

what Santa Claus has got for them in his sack.



They could certainly do with some seasonal cheer. The century is not

ending on a very happy note for many of them. Battered and bruised, a

number of once-proud Titans of the tills can only lick their wounds and

hope that next year really is a new dawn.



But there is an unlikely exception: Santa seems to have been listening

to Sir Geoff Mulcahy. He is the head of Kingfisher, which last week

reported third-quarter figures up 50% from last year, with like-for-like

up 6.4%.



Kingfisher is, astonishingly, the largest DIY retailer in Europe.

Astonishingly, because it was only a few years ago that Mulcahy was

under siege because of problems with DIY outfit B&Q, while the

Woolworths chain was considered, to put it kindly, lacklustre.



Ironically, while his company only comes in at 81 in Management Today’s

list of most admired companies, Mulcahy himself is equal third with

Richard Branson as the choice for most admired individual leader.



What is his secret? Well, that’s the secret in itself: there isn’t one.

Rather than give up when shareholders were baying for his blood, he

stayed put and used some basic marketing common sense, not only to put

the company back on a firm footing,but firm enough so the abortive Asda

merger was embarrassing, but by no means fatal.



There are four main elements to the Kingfisher story, and thus four

lessons. The first element consists of an ability sadly not emulated by

many other UK retailers: an understanding of how to operate in foreign

markets - including France, not always the friendliest of environments

for UK merchants.



Almost 40% of Kingfisher sales, in fact, now come from outside the UK;

there are now around 500 various Kingfisher DIY stores in nine different

countries. Kingfisher Electrical, with brands such as Comet in the UK

and Darty in France, is actually headquartered in Paris. Sure, there is

the problem of what to do with Woolworths - but compared with what it

was before, even a 1.1% hike in like-for-like growth on the UK high

street doesn’t seem bad.



The second element is the way the company balances centralised

management control with delegation where it counts. Mulcahy has brought

in new management talent, notably from Wal-Mart, and basically allows

the brands to get on with things. Contrast the rather dubious way Marks

& Spencer has fiddled with what was an esteemed US men’s clothing brand,

Brooks Brothers, so that its once-clear positioning has become

confused.



Third is the approach to innovation. As retail analysts Verdict pointed

out recently, chief beneficiary of the boom in DIY is B&Q, whose new and

bigger Warehouse stores are thriving. Comet is reinventing itself as

’retail theatre’, while the group’s e-tailing presence is growing.



Finally, there is the least tangible element: motivating staff enough so

that brand promise and brand delivery reach some sort of comfortable

accommodation. Few service industries in Europe really succeed at this,

but chains like B&Q and Comet work hard at it.



So while his counterparts at flagging firms such as M&S and Sainsbury’s

mope over their mulled wine, Mulcahy can relax and enjoy the

festivities.



But not for long: Wal-Mart is on the march, and a week in retailing, as

in politics, can be a long time.



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