Kingfisher, Europe's top home improvements retailer, posted a 23 per cent fall in first-half profits yesterday in what it said were the toughest markets it had faced for years, and announced a £200 million revamp of its B&Q operation.
Kingfisher will take the one-off costs of the overhaul in the second half as it closes 22 stores, shrinks 16 and takes a hatchet to operating costs.
The changes are part of an action plan that last week saw it axe 400 office jobs.
The retailer, which has 335 B&Q sites, did not disclose the locations of the outlets to close.
The stores employ a total of 1,250 people, with B&Q hoping to relocate many.
Adjusted pretax profits at Kingfisher, which also trades as Screwfix Direct in the UK and Brico Depot in France, fell to £254.3 million.
The initiatives came as Kingfisher announced a 33.7 per cent slump in UK profits for the six months to July 30, and said the domestic market had continued to deteriorate since then.
B&Q total sales fell 2.6 per cent to £2.1 billion in the six months, reflecting reduced footfall rather than a downturn in average transaction values.
Expansion in eastern Europe and Asia meant that total retail sales at Kingfisher were 3.3 per cent higher at £4.079 billion in the 26 weeks to July 30.
But like-for-like sales at B&Q - which accounts for about half of group sales - fell seven per cent, with the total UK same-store figure down 6.4 per cent.
"We don't think anyone expected this, but this is a highly-geared business with its high fixed cost base," chief executive Gerry Murphy said.
"Clearly it's not very pleasant for shareholders, management or anyone, but I don't think shareholders will be unduly unsettled in the context of a market that is generally very soft."
French like-for-like turnover rose one per cent, with the main Castorama unit showing a 3.2 per cent same-store decline.
The French home improvements market had grown at its slowest rate in eight years, the company said.
Declining to give a firm forecast for the year, chief financial officer Duncan Tatton-Brown said he would not be surprised if market estimates for full-year pretax profits fell to around £475 million from around £540 million.
Rising energy costs, higher tax and pension contributions, increasing household debt and a weak housing market have all sapped consumer confidence and retail profits.
In response, B&Q is to spend £ 200 million on revamping stores.
The figure includes a £12 million charge, announced last month, for cutting head office jobs and revamping the B&Q regional structure.
Some 16 Warehouse stores will be cut back, with the released space offered to other retailers. This and the store closures would mean a reduction of about seven per cent in total selling space.
Kingfisher shares have recently been supported by takeover speculation after US investor Warren Buffett's Berkshire Hathaway bought shares in it. Berkshire has also bought shares in US firm Home Depot, rumoured to have looked at a takeover of Kingfisher in the past.