Gusbourne Share Discussion Threads

[grupo guitarlumber] 17/2/2005 08:40

Diy Giant Report Sales Fall

By Graeme Evans, PA City Editor

Retail giant B&Q reported a fall in sales today after seeing consumer demand weaken and trading conditions become more competitive.

The DIY chain, which is part of the Kingfisher group, posted a 1.2% decline in like-for-like sales for the 13 weeks to January 29.

Sales of flooring, lighting and wall decorations were worst hit as ranges in these areas awaited a review this year. Demand in the kitchen and bathroom departments edged ahead of a strong quarter a year earlier while price cuts and new ranges helped stimulate sales of paint and building materials.

Chief executive Gerry Murphy said: "The environment in the UK is tough and has been getting tougher for a while. The evidence is not just from our numbers but the British Retail Consortium data has been softening for two years.

"There's more competition right across the board in a softer market where customers are spending more cannily."

The weaker winter performance left B&Q sales for the year to the end of January up by 1.3% on a like-for-like basis. The total figure of £4.09 billion was 4.9% higher when new stores were included.

The trading update reflected official retail figures which showed sales rose by 0.3% in the three months between October and December against the previous quarter – the lowest rate of growth for six years.

Homebase – part of Argos chain GUS – recently said the DIY market was showing signs of slowing but that it achieved a 4% rise in like-for-like sales for the 15 weeks to January 8.

Kingfisher said the weaker performance by B&Q had been offset by sales growth in France, where it operates Castorama and Brico Depot, and in Italy and China.

Group sales for the three months to January 29 were up 7.1% to £1.76 billion with the figure ahead 0.6% on a like-for-like basis. That represented a downward trend on the 3.9% gain in same-store business for the whole of the year.

The company added that it expected to meet City profits forecasts when it announces full-year results on March 17.

[grupo] 06/2/2005 08:14

February 06, 2005

B&Q suffers at home as its bosses build global empire
The DIY chain looks tired, so the City is keen to hear how owner Kingfisher aims to revive it. By Richard Fletcher



THE B&Q store in Old Kent Road, Peckham, southeast London, is just seven miles from the new £50m headquarters of its parent company, Kingfisher. But it is hard to believe that anyone from head office has visited the store in years. The top of the giant B&Q sign over the entrance is missing and a promotional banner advertising 5,000 price cuts is hanging precariously off the side of the building.

There are no trolleys at the entrance - not that there is much to put in them anyway, with aisles of empty shelves inside the store. And if you want B&Q to cut some wood for you, choose your time carefully - the store may be open from 8am until 8pm, but they will cut wood only between 11am and 3pm.

In the garden centre, half the special-promotion chrysanthemums are dead (and the other half are probably past saving). The hebe plants are not faring much better.

Five years ago B&Q was dubbed a "category killer" by retail consultants. It is still the world's third-largest home- improvement retailer and has operations in France, Poland, Italy, China and Taiwan.

But in the Peckham store B&Q appears to be losing its way, and former directors and observers claim it is not an isolated example. "They're heading for a fall. They haven't got a grip on the business," said one former executive.

Another one-time employee said: "I went into a store last month - even my wife could see how badly run it was."

To some in the industry it is reminiscent of Marks & Spencer a decade ago: focused on international expansion, the retailer failed to notice what was happening at home.

In 11 days Gerry Murphy, the chief executive of Kingfisher, will update investors on fourth-quarter sales. On Friday Kingfisher shares closed at 312Äp.

Few in the City expect good news. In the past three months the number of analysts recommending that investors buy shares in Kingfisher has halved from eight to four.

Sales growth at B&Q has stalled. In December the retailer admitted that third-quarter sales had been disappointing, with like-for-like sales growth of only 1.3% despite weak comparisons. This raised fears that all was not well at B&Q.

"Weak November sales reflect what looks like a more serious and possibly longer-lasting slowdown in consumer and DIY spending," wrote Aymeric Poulain, analyst at Merrill Lynch.

So what exactly is going on at Kingfisher? Since the demerger of Woolworths and sale of Superdrug in 2001, Kingfisher has been focused on DIY retailing. With its dominant position in the UK - where it owns 336 B&Q stores - the firm has looked overseas for growth.

But although it now owns 262 stores round the world, the international division generates only 10% of Kingfisher's profits. The management may focus its time on the latest store opening in Shenzhen, China, but the fact is that 90% of Kingfisher's profits are still made in the UK.

But while Murphy has been searching overseas for growth, from Turkey to South Korea, the competitive landscape at home has been changing.

Homebase, which struggled to compete against B&Q when it was owned by J Sainsbury, is now part of GUS, the retail powerhouse that includes Argos. Over the past two years Homebase has targeted women shoppers with a "softer" offer that has seen the retailer sell bread bins alongside plasterboard. Meanwhile, Wickes, which was recently bought by Travis Perkins for £950m, is targeting the casual builder who has traditionally used B&Q rather than builders' merchants.

Richard Hyman, chairman of Verdict Research, argues that B&Q's dominant position, combined with Britain's tight planning restrictions, makes it difficult for competitors to acquire the sites to compete head-on with B&Q's giant Warehouse stores.

But Murphy is also facing increasing competition from a number of smaller niche retailers, such as Floors-2-Go, that can obtain stores more easily.

Next to the neglected B&Q store in Peckham is a Topps Tiles outlet. Last month Nicholas Ounstead, chief executive of Topps, announced that like-for-like sales in the first quarter rose 15% while turnover was up 24%. Topps plans to open 24 new stores this year, bringing the total number in the UK to 244 by the end of 2005, and Ounstead hopes eventually to open 350 stores.

Murphy is not just struggling with B&Q. In 1999 Kingfisher acquired Screwfix, the internet and mail-order business that generates £230m of annual sales, largely to the building trade. But in November Kingfisher was forced to close the website and limit the size of orders after a string of problems.

The difficulties were caused by the decision to close Screwfix's warehouse and head office in Devon and move to a central one in Stoke-on-Trent, Staffordshire. But Kingfisher struggled to fill 100 jobs because of competition from other Midlands employers.

Mark Goddard-Watts, who founded Screwfix and later sold it to Kingfisher, is now cashing in on the problems after launching Toolstation, a rival service.

Kingfisher insisted that the problems at Screwfix have now been solved. But insiders disagree: "What would they know? We are still having teething problems," said one.

Murphy refused to talk about the British business when he briefed journalists last month on his international plans. However, a spokesman insisted that the criticism was unfair.

"Over the past three years B&Q has undergone a reinvention with key changes in store format, product ranges, price and distribution channels available to customers," he said.

If Murphy announces disappointing British sales next week, he may find he has no choice but to answer increasing concerns about Kingfisher's core operation in this country.

[ariane] 04/2/2005 09:35

'Bullying' Homebase demands free goods from its suppliers
By David Derbyshire, Consumer Affairs Editor
(Filed: 04/02/2005)

The DIY chain Homebase was accused yesterday of using "bullying tactics" after demanding that its suppliers provide enough free goods to fill 20 new stores.



It also insisted in a confidential letter that suppliers subsidise its refurbishment programme and help to pay for its one-day sales.

One grower, who supplies the chain's garden centres, was unwilling to be named but described the attempt to rewrite the terms and conditions of trading unilaterally as "outrageous".

"It is bullying of the worst kind," he said. "It is hard to believe that any business would use this kind of tactic in this day and age. It is nonsense and none of us should comply."

However, the Office of Fair Trading said there were insufficient grounds for an investigation. Industry experts said that such demands from the big high street names were becoming common.

Homebase, which had an operating profit of £102 million last year, said the policy brought it in line with competitors and would benefit the industry. But manufacturers and growers complained that the store was unfairly tightening the screws on smaller suppliers.

Similar attempts by supermarkets to squeeze the supply chain were heavily criticised by the Competition Commission in 2000 and led to the introduction of an industry code of behaviour.

Homebase's letter, which was signed by the commercial director, Carolyn Simons, was sent to all suppliers last month.

It said: "With immediate effect, we will require all suppliers to provide all stock fill for new stores free of charge. This will include up to 20 new stores for the next calendar year.

"We will also require a contribution towards stock value for those stores which are in our major refurbishment programme."

The letter also tells suppliers that they will have to fund Homebase's 10 per cent discount days. The "value of your contribution" will be debited from suppliers' accounts in February, it says.

The Office of Fair Trading said: "This sort of issue could be a competition concern if the company was abusing a dominant position."

However, Homebase had only a 19 per cent share of the DIY market, not enough to warrant an investigation, it said.

Homebase, which has nearly 300 stores, has been owned by GUS plc since 2002. It confirmed that it had informed suppliers "that we are planning to bring our terms and conditions into line with our main competitors".

It added: "The majority of our suppliers understand the business case for these changes and we hope that it will enable us all to improve the service and value that we offer to customers."

[waldron] 25/1/2005 06:41

DIY adherents

Four out of five British women are dedicated to DIY and one-third of them declare that they take on the majority of the jobs that occur in and around the home. Over 70 per cent of these women consider themselves just as good at DIY tasks as their male counterparts, if not better. This emerges from a survey carried out among 1 600 customers of the Argos Retail Group, which also includes Homebase. More than half of the women consider themselves to be good DIYers because they are capable of logical thinking and solving problems. The majority of men, on the other hand, are of the opinion that it is because they remain calm. Eighty per cent of the women are convinced that power tools make their access to DIY projects easier. According to the survey, the enthusiasm of these women for DIY is attributable to TV makeover programmes like Changing Rooms.




20 January 2005

[alfg] 13/1/2005 11:15

Initiated coverage at 935 ...they`re trying for a ball buster short squeeze today ..could even get to 950 but this entry point looks reasonable

[alfg] 13/1/2005 09:41

Argos achieved a slight increase in its gross margin in the period compared to
last year, while continuing to offer lower prices and increasing its promotional
activity. This rise was funded by gains from its supply chain programme and the
impact of a weaker dollar.

I`d certainly put this one on the radar boys and girls .... if the margins are dependant upon a weaker $ and the trading statement is simply in line with market forecasts ... this one is well worth watching ...

[maywillow] 13/1/2005 07:05

RNS Number:3212H
GUS PLC
13 January 2005


13 January 2005

GUS plc
Third Quarter Trading Update



GUS plc, the retail and business services group, today issues its regular update
on trading.


John Peace, Group Chief Executive of GUS, said:


"Despite a challenging retail environment, Argos again outperformed its market,
with sales up 6% and gross margin slightly ahead. Experian achieved a record
quarter for growth, with an exceptional increase in sales of 30% in North
America. Against this background, we remain comfortable with expectations for
the Group for the full year."



Argos Retail Group


% change in sales year-on-year for 15 weeks to 8 January 2005

%
Argos - total 6
- like-for-like 1

Homebase - total 8
- like-for-like 4


Argos
In a period where UK retail demand weakened significantly and competition
intensified, Argos again outperformed its market by offering consumers improved
choice, value and convenience. Its sales grew by 6% in total, while gross margin
also increased.


Of the 6% total sales growth in the period, 5% came from new stores, which
continue to perform well, and 1% from like-for-like growth. Toys and jewellery
were difficult markets; their contribution to sales in the third quarter is
about double that in the rest of the year. There were, however, particularly
strong performances from consumer electronics, photography, white goods, mobile
phones and leisure.


Argos achieved a slight increase in its gross margin in the period compared to
last year, while continuing to offer lower prices and increasing its promotional
activity. This rise was funded by gains from its supply chain programme and the
impact of a weaker dollar.


Argos Direct, the delivery-to-home operation, grew its sales by 15%,
representing 18% of revenue compared to 17% in the same period last year. Orders
via the Internet increased by about one third, contributing 5% of sales. The
Argos website was again the most frequently visited UK high street retail
website in December.


The main Spring/Summer catalogue, which will be launched on 22 January,
continues to offer customers better value and increased range with 13,300 lines,
3% more than a year ago. The new Argos Extra catalogue will have 17,500 lines,
also up 3%. Argos Extra traded to plan over the peak period and preparations
continue for national roll-out. The offer, which is currently available in 157
stores, will be extended to a further 30 stores and to the Internet by early
summer.


Homebase
Against a slowing market, Homebase increased its sales by 8% in total. Of this,
4% came from new stores, with four new stores having opened in the quarter,
bringing the total to 287. Like-for-like sales increased by 4%, boosted by the
timing of a "10% off" event included at the end of this period but in the fourth
quarter last year. New ranges in paint, tiling and lighting continued to perform
well, as did kitchens and bathrooms.


Gross margin was in line with last year, with supply chain gains funding
increased promotional activity, especially in seasonal ranges and big ticket
items.


The in-store experience at Homebase continues to be enhanced through its focus
on improving customer service, stock availability and retailing basics, as
demonstrated by regular customer surveys.


Experian

% change in sales year-on-year for the three months to 31 December 2004

Continuing activities only At actual exchange At constant
rates % exchange rates %

Experian North America 19 30
Experian International 18 18
Global Experian 19 24


Experian had a record quarter for growth, with total worldwide sales from
continuing activities up by 24% at constant exchange rates. This builds on five
consecutive six-month periods of double-digit sales growth.


Experian North America
In dollars, Experian North America sales growth from continuing activities
accelerated to 30% in the third quarter. Corporate acquisitions, most of which
were completed in the second half of the last financial year, accounted for 13%
of this. Exceptional growth was delivered by Consumer Direct and by MetaReward,
its Internet lead-generation business acquired in November 2003. The latter had
an outstanding quarter, undertaking some large, but lower margin, client
projects.


Excluding acquisitions, Credit sales showed very strong growth, reflecting
product innovation and market share gains. Business information, account
management and other value-added solutions (such as online notifications, Scorex
and fraud) all grew strongly, as did Consumer Direct. Sales to the mortgage
sector were level with last year. Excluding acquisitions, the rate of growth in
Marketing sales, which account for about a quarter of total revenue, was
mid-single digit.


The first phase of the roll-out of the free credit report service, as required
under the FACT Act, took effect from 1 December 2004. The planned cost recovery
charge, initially at half its final level, contributed around 1% to total sales
in the quarter.


Experian International
Experian International, which accounts for about 45% of Experian's worldwide
revenue, grew sales from continuing activities by 18% at constant exchange
rates. Of this, 12% came from acquisitions, predominantly QAS, the address
management software company acquired in October 2004, which is trading to plan.


Excluding acquisitions, broadly similar rates of sales growth were achieved by
each of Credit, Marketing and Outsourcing. Double-digit sales growth was
delivered in many areas including UK credit information and value-added
products; in Business Strategies (micromarketing and economic forecasting); in
information services in France; and from operations in Italy and in Eastern
Europe (particularly Russia).


Burberry
GUS has a 66% stake in Burberry Group plc. The following summarises the latter's
Trading Update released on 12 January 2005.


% change in sales year-on-year for the third quarter ended 1 January 2005
%
At actual exchange rates 3
At constant exchange rates 7


Total revenues at Burberry in the third quarter increased by 7% at constant
exchange rates.


Retail sales, which accounted for approximately 59% of total revenue in the
period, increased by 6% at constant exchange rates, driven by contributions from
newly opened and refurbished stores. Wholesale sales increased by 5% at constant
exchange rates. With Spring/Summer merchandise shipments concentrated in the
fourth quarter, Burberry continues to anticipate mid to high single-digit growth
for the Spring/Summer 2005 season. Licensing revenues increased by 14% at
constant exchange rates, reflecting strong gains by global product licensees.


Future announcements

GUS will announce its Preliminary Results for the 12 months to 31 March 2005 on
25 May 2005. The Second Half Trading Update will be on 14 April 2005.



Enquiries


GUS
David Tyler Finance Director 020 7495 0070
Fay Dodds Director of Investor Relations


Finsbury
Rupert Younger 020 7251 3801
Rollo Head


GUS announcements are available on its website, www.gusplc.com. There will be a
conference call to discuss this update at 3pm today, with a recording available
later on the GUS website.


Certain statements made in this Trading Update are forward-looking statements.
Such statements are based on current expectations and are subject to a number of
risks and uncertainties that could cause actual results to differ materially
from any expected future results in forward-looking statements.







This information is provided by RNS
The company news service from the London Stock Exchange

END
TSTILFSDLIIFLIE


GUS(GUS)

[denny] 12/1/2005 14:21

Share price started dropping like a stone around 1300hrs. I wonder if this is inside information on GUS's trading statement tomorrow morning !!!!

[waldron] 04/1/2005 20:14

LONDON, January 4 (newratings.com) - Analysts at Dresdner Kleinwort Wasserstein maintain their "buy" rating on GUS (GUS.ZRH), while raising their estimates for the company. The target price has been raised from 965p to 1045p.

In a research note published this morning, the analysts mention that GUS' sales this year would be driven by the company's Experian, Homebase and Burberry segments. The analysts believe that GUS would de-merge its Experian segment in the UK during the near term. The EPS estimates for 2007 and 2008 have been raised by 1% and 3%, respectively.

[octopus100] 23/12/2004 15:46

Would love to see the yanks chuck in a last minute bid over Xmas - come on Mr Buffett

[octopus100] 23/12/2004 10:11

Lloyds getting involved they aint stupid something very smelly going on.

[maywillow] 22/12/2004 09:36

US DIY giant on brink of UK invasion

22 December 2004
AMERICAN do-it-yourself chain Home Depot is believed to be poised for an assault on the UK market, with Kingfisher seen as the most likely target.

The US chain's decision to launch a firm bid for Wickes demonstrates that it is serious about crossing the Atlantic.

Retailers have feared for years that Home Depot would come to the UK and make life even more competitive. Some thought the weak dollar would be a deterrent but this is clearly not the case.

Home Depot is the world's third-largest retailer. After a few years of tough trading in its home market, the retailer appears to be back on track and ready for expansion.

It had sales of $64.8bn (£34bn) last year and made profits of $4.3bn, so would have had no trouble financing the £950m purchase of Wickes.

Yet it was prepared to lose the auction. This suggests Home Depot may have set its sights elsewhere. Perhaps it wanted to take a close look at the financial position of Wickes and its sister chain Focus to gain a better understanding of the UK homeimprovement sector.

Kingfisher (down 2p to 305p) owns UK market leader B&Q and would be the ideal prize. It has a market value of £7.1bn, but investors would probably want at least £9bn to back a takeover. Combining the two firms would result in huge savings in the cost of buying DIY goods.

It would also give Home Depot - which has stores in the US, Mexico, Canada and Puerto Rico - a major presence in the UK, France and China.

Next year may herald further consolidation in the DIY market. GUS, which owns Homebase, is tipped to bid for Focus and possibly furniture chain MFI. Kingfisher is also seen as a possible bidder for MFI.

[multisync5] 16/12/2004 21:05

evolution securities? lol, bunch of losers. most probably gus would pass 1000p once they release their result on tuesday

[ariane] 16/12/2004 18:55

GUS Shares Rise to a Record on Report of Possible Bid (Update3) Dec. 16 (Bloomberg) -- Shares of GUS Plc, Britain's second- largest retailer by market value, rose 4.7 percent to a record as Retail Week magazine said a group of private-equity firms and banks may make an 11 billion-pound ($21 billion) bid.

The unidentified group may offer 1,100 pence a share and then break up the company, which includes U.K. retailers Argos and Homebase and credit-information company Experian, Retail Week reported, without saying where it got the information. GUS also owns 66 percent of luxury-goods seller Burberry Group Plc.

GUS's U.K. retail businesses would be listed on the London stock market, while Experian shares would trade in the U.S., according to the magazine. Active Retail Capital, a company formed this year by the former head of GUS's home-shopping business, Alan Taylor, is advising the group, Retail Week said.

London-based GUS doesn't comment on speculation, said a spokeswoman who declined to be identified.

Shares of GUS rose 42 pence to 930 pence in London, giving the company a market value of 9.4 billion pounds. About 20 million shares changed hands, almost three times the number traded on an average day in the last six months.

Credit-default swaps for GUS, which owes bondholders about 1.1 billion pounds, rose as much as 15,000 euros to 65,000 euros from yesterday, according to Deutsche Bank AG. That's the annual cost of insuring 10 million euros of debt for five years. The cost of insuring its debt at the beginning of the week was about 38,000 euros, according to data compiled by Bloomberg.

Analysts such as Anne Critchlow at ING Securities and Nick Bubb at Evolution Securities said GUS probably won't be bought.

``It's just a non-starter because there is nothing a consortium could do that GUS couldn't do themselves,'' said Bubb.

GUS is focusing on its U.K. retail operations and said in May it might sell or spin off Experian over the next two years.

[octopus100] 16/12/2004 15:11

Rumours of bid

[jussyman] 16/12/2004 15:10

LONDON (AFX) - Shares in GUS PLC, the retail and business services group
that launched a strategic review in May, edged higher in morning trading on the
back of a report in trade magazine Retail Week that it has attracted the
interest of a consortium of private equity firms and global banks willing to
table an 11 bln stg bid.
The report claimed the consortium is prepared to offer 11 stg a share, then
break up the group, spinning off the Argos Retail Group (Argos and Homebase) and
the financial services arm Experian, and offloading its 66 pct stake in Burberry
Group PLC.
Retail Week cited one source as saying Active Retail Capital, set up earlier
this year by former GUS executive Alan Taylor, is advising the consortium.
A spokeswoman for GUS declined to comment.
At 11.07 am shares in GUS were up 5 pence at 893, valuing the group at 9.01
bln stg.
jdd/ma

[mick52] 16/12/2004 15:09

what the heck is going on?

[a4] 16/12/2004 15:01

why is it up so much today ?.

[maywillow] 14/12/2004 16:13

3:41pm (UK)
Diy Chain Adverts Were Best Remembered - Report

By Graham Hiscott, PA Consumer Affairs Correspondent

Commercials for DIY chain B&Q were the most unforgettable adverts of the past year, according to a report published today.

The TV ads, featuring B&Q workers, were remembered more than any others in research for trade magazine Marketing.

The title's weekly Adwatch survey looked at which commercials people can recall from the previous week.

B&Q got the highest score over the space of the year, followed by adverts for insurance firm Churchill featuring a nodding dog.

Burger giant McDonald's was third, then supermarket chain Asda, electrical retailer Currys, DIY chain Homebase, insurance company Direct Line, high street bank Halifax, catalogue store chain Argos and finally the National Lottery.

[daz2004] 07/12/2004 15:52

IMO Bearish chart appearing, can't regain 900p, and with bad retail sentiment I may still get my 800p re-entry level. Retail sector not the one you want this christmas with big discounting still not helping many, DYOR.

[ariane] 01/12/2004 09:36

Top Picks For DIY Shares

By David Kuo (TMFDragon)
November 30, 2004



Any industry worth over £22b and growing at 7% a year is certainly worth a look in.

The Repair, Maintenance and Improvement market is reckoned to be one of the fastest growing retail sectors in the UK. The major players here include Kingfisher (LSE: KGF), which owns B&Q, and the privately-owned Focus Wickes. GUS (LSE: GUS), which owns Homebase, is another significant player.

However, a recent NOP survey suggested that one in four Britons would gladly hang up their hammers and pay for professional help. The study showed that limitations on time and the quest for top quality finishing are putting off many Britons from DIY.

Consequently, it's reckoned householders now spend an average of £4,500 a year on tradesmen rather than attempt DIY jobs. Top of the pay list were builders and plasterers, with window fitters also in the frame as a close third.

In my view, building, plastering and fitting windows are not the chores that most people would consider to be typical DIY activities. Instead, consumers are more likely to turn their hands to easier-to-accomplish tasks such as painting, fitting floorboards and tiling.

Topps Tiles (LSE: TPT) is one of Britain's leading tiling specialist, with a 20% market share. Today, the company posted an 80% jump in annual earnings to £34m on sales that rose 33% to £158m. Over the next four years, Topps Tiles, which runs 220 outlets, believes the market for floor products could grow 26%.

Topps Tiles expects to capture some of that market expansion, with sales anticipated to rise 14% to £180m next year. Profits are expected to grow significantly too, some 16% to £39m at the pre-tax level. However, at 207p, the shares look fully valued at 17 times 2005 earnings. The business is also valued at 2.5 times price-to-sales, which leaves little room for error.

Apart from tiles, Topps Tiles also supplies laminate and real wood flooring. This is another area that has grown significantly. In September, Floors 2 Go (LSE: FGO), a retailer of wood floors, said first-half sales surged 124% to £35m. Like-for-like sales improved 32% and operating profits were up 314%, albeit from a low base. At 70p, Floors 2 Go is valued at 14 times forward earnings, which does not look expensive if the company can achieve profits growth of 46%.

Whilst niche retailers can be a good way to gain exposure to well defined segments of a market, there are also significant risks. Consequently, Kingfisher with its broader range of activities could be a better long-term bet. In my view, Kingfisher, on a forward price to earnings (P/E) ratio of 13 and a yield of 3.9%, looks interesting. GUS is also be worth considering, as it trades at 12 times earnings and yields 3.6%.

[maywillow] 25/11/2004 14:29

Bigger event

The DIY & Garden Show, which will be held in London from 16 to 18 January, will be the biggest event for four years. "The number of manufacturers from the UK is increasing, as is the number of international suppliers in the first year without a Cologne Fair," says sales director Paul Grinsell. It is expected that 22 companies will be attending from the USA as participants on a group stand organised by the Worldwide DIY Council. Among them will be the two big cooperatives, Ace Hardware and True Value. Other international exhibitors will be coming from Austria, Canada, Denmark, France, Germany, Holland, Slovenia, Switzerland and Taiwan. Together with the Totally Tools event for hand and power tools, which is to be held in parallel, more than 200 exhibitors are expected in London.




25 November 2004

[waldron] 18/11/2004 17:16

4:01pm (UK)
Christmas Reprieve for Extended Warranties Reform

By Graham Hiscott, PA Consumer Affairs Correspondent


Retailers have convinced ministers to delay reform of the extended warranties market on electrical goods until after Christmas.

The Department of Trade and Industry (DTI) has also agreed to drop clauses relating to the sale of policies following lobbying by the industry.

In July this year the DTI published proposals to shake-up the £900 million a year market for extended warranties on households electrical items.

Consumer minister Gerry Sutcliffe said at the time: "Recognising the importance of the Christmas period for warranty sales, we intend to introduce the necessary changes by the end of November."

The DTI has now agreed to postpone implementing the reforms until next March following consultation with retailers.

The new regulations will force shops to show the price of the extended warranty alongside the electrical goods, in store and in adverts.

Consumers will be given information about their statutory rights and cancellation rights and a 45-day cooling-off period in which to cancel.

In addition, those who do not buy the policy immediately will have up to 30 days to take it up, including any discounts.

But the DTI has agreed to drop a clause that required retailers to give the price of the extended warranty "similar prominence" to the price of the electrical product.

Businesses argued that displaying the two prices same size could confuse consumers and that prices should be "clearly legible" instead.

Retailers will do no longer have to give a leaflet to help guide customers before buying a warranty either.

The DTI said many of the changes it proposed had already been adopted by major retail chains.

A consultation on the new changes will last until December 20.

Mr Sutcliffe said today: "Our proposals have been largely welcomed by businesses but there was concern about the speed of making these reforms before Christmas.

"While it is important to protect consumers, we have no desire to place unnecessary burdens on retailers, especially as many already have the proposed changes in place, which is why we have decided to delay implementation until next year."

But Tim Young, from the consumer organisation Which?, said: "Retailers have been ripping off their customers through overpriced warranties for far too long already.

"The DTI's decision to delay legislation until after the busiest shopping period of the year means it's the retailers who'll be celebrating this Christmas – yet again.

"Patricia Hewitt announced these rules before last Christmas, so the idea that implementing them a year later will place too much of a burden on retailers is nonsense.

"The DTI shouldn't be so tardy and the industry shouldn't be so cynical."

Warranty Direct, which sells warranties direct, said today's changes "plunged consumers into uncertainty and confusion".

Duncan McClure Fisher, managing director of Warranty Direct, said: "This consultation once again dilutes the protection the consumer was originally offered."

A report from the Competition Commission in December last year found high street chains guilty of charging excessive prices for extended warranties on household electrical products.

It said policies were up to a third more expensive because the current market favours the retailer.

Trade and Industry Secretary Patricia Hewitt backed the Competition Commission's proposals.

The report found 80% of policies taken out at the point of sale were supplied by five retailers in the UK – the Dixons Group (including Dixons, Currys, PC World and The Link), Comet, Powerhouse, Littlewoods and Argos.

The three electrical retailers made typical profit margins of between 8.1% and 9.1% on most products yet for warranties the figure was between 28.3% and 33.6%, it said.

The investigation into extended warranty was started by the Office of Fair Trading in October 2001 and referred to the Competition Commission in July 2002.

[daz2004] 18/11/2004 13:30

As of yet no big upside, even with all these broker recommedations?

DYOR.

Edited:

If after today these don't climb at least 10p on all these broker recommendations then I'd worry!