KINGFISHER today nailed its future to the mast of French DIY giant Castorama, but its fate remains less easy to read than that of Sir Geoff Mulcahy, its chief executive.
He will retire, it was confirmed today, but Kingfisher may find its £3.2 bil
lion purchase brings with it insoluble problems.
Having sold off Woolworths and Superdrug, it is now about to shed Comet, leaving it as a DIY pure-play. But in taking that route, it is betting it will be able to overcome antiquated and ingrained business habits at Castorama, which have seen it lag behind its competitors.
Castorama has refused to follow the patterns of innovation from B&Q, saying local customs and assumptions are different. The main difference seems to be the French trade unions’ hostility to reform.
Previously Kingfisher has been unable to counter that view, as its majority ownership did not come with voting control. Some would say that made a good argument for taking the opposite course to today’s decision and renouncing the French link and surrendering B&Q to leave Kingfisher only recognisable as Comet the electrical retailer.
However, Sir Geoff was reluctant to retire without pulling off a spectacular coup.
This is all a good reason to avoid Kingfisher’s shares. Companies exist to make money, not to assuage the egos of their leaders.
Saving grace THE current rumpus about endowment mortgages being mis-sold lowers morale in the financial services industry. Even pension contracts are looking ever less rewarding.
This is a problem of far wider importance than the bleak old age of the policy-holders. Britain needs to have a good supply of long-term savings vehicles.
A hundred years ago most families saved through institutions that are now only marginal players. It is time friendly societies were revived. At the moment the tax-free status of these agreeable entities is so favourable the rest of the money men seek to constrict them.
Outfits like the Scottish Friendly Society are limited to only modest monthly savings. All the restrictions should be relaxed. Friendly societies are mutuals - clubs. This means they have a strand of trust a proprietary company will lack.
In Edinburgh’s own much admired Standard Life we have that rare beast - a large mutual.
The friendly societies need to fight their corner. They are far too polite and wary.
They might begin a popular campaign to offer far better deals than the current rascals deliver.
A wild shotIT seems likely top executives of the Football League may miss the big matches in the World Cup. They are going to have to be in court listening to their barristers arguing they were shafted by ITV Digital.
The defunct company’s owners, Carlton and Granada, say the contractual obligations were to the television service and not to its proprietors.
The law seems quite plain on this. It is not easy to see how the footballers can draw blood from a company in administration with only a few paper clips as assets.
The managers of the beautiful game have to adapt to make the sport more attractive for the future. Niggling over a failed past seems fruitless.
Once again only the lawyers will profit.
