Interview: -Mr Bricolage says French DIY market improving

Mr Bricolage SA

06/03/2014 11:12

* French 2014 DIY mkt seen up slightly, Mr Bricolage to outperform * January trading good but too early to say if recovery to last * Mr Bricolage hopes DIY Sunday opening dispute resolved soon By Dominique Vidalon and Pascale Denis PARIS, March 6 (Reuters) - French home improvement retailer Mr Bricolage  MBRI.PA  aims this year to outperform a French market which is headed for a slight rise in sales after two consecutive years of decline. The industry saw a trading improvement in January, but it is too early to say if that will last, Chairman and CEO Jean-Francois Boucher told Reuters in an interview.  Mr Bricolage, which ranks as France's third-largest home-improvement group by sales after Adeo, owner the Leroy Merlin stores, and Kingfisher  KGF.L , commands a 12 percent share of a French market worth 20 billion euros, against over 60 percent for Adeo and Kingfisher combined. "One can hope for zero plus growth in the French market in 2014 and our goal is to outperform the market," Boucher said. "January was encouraging but we have yet to see an improvement in fundamental (economic) indicators. The market remains volatile," he added. There were still "no signs" of an upturn in the French property market - a key component for the DIY sector - while consumer confidence and spending were  "not in great shape," hit by higher taxes and unemployment fears, Boucher said. French consumer spending fell 2.1 percent in January from December, against forecasts for a rise, data released by the INSEE statistics agency last month showed.  ID:nP6N0KN00Z  The European Commission also said last month it expected France's jobless rate to stay at 11 percent this year and next, showing little confidence in President Francois Hollande's promise to kickstart growth and job creation through economic reforms. ID:nB5N0LH003  The group, which operates under the Mr Bricolage, Les Briconautes and L'Entrepôt Du Bricolage brands, has been suffering along with other European retailers as cash-strapped customers hold off buying "big ticket" items like kitchens and bathrooms. The company blamed bad weather in the first half of 2013, which hit store visits and building projects, along with weak consumer sentiment, for an 1.9 percent decline in sales for the French DIY market in the year as a whole. Its own sales fell less sharply, by 0.9 percent. In January this year the French DIY market rose 4.1 percent in value compared with a 4.8 percent fall in January 2013, according to Bank of France data. Boucher would not disclose Mr Bricolage's performance in January but said it was "off to a good start". His comments came after the group reported late on Wednesday a 29 percent fall in full-year operating profit to 22.1 million euros, hit by charges tied to the restructuring of its integrated stores and online expansion. For 2014 the group has forecast a sharp rise in net and operating profits as it will reap the fruits of cost savings and of the restructuring made last year. Mr Bricolage shares, which have gained 17 percent since the start of the year to give it a stock market value of 122 million euros, were up 0.94 percent to 11.80 euros by 1012 GMT. The stock trades on 10.89 times 12-month forward earnings against 15.61 times for UK-based Kingfisher Plc  KGF.L , whose French business comprises Castorama and Brico Depot, Thomson Reuters data shows. SUNDAY STRUGGLE Several DIY chains, including Bricorama, Castorama and Leroy Merlin, have been pressing the French government to allow them to do business on Sunday to preserve jobs and fight competition from Internet retailers. In mid-February, France's highest administrative court suspended a decree that was allowing Do-It-Yourself stores to open on a Sunday after a complaint from trade unions. ID:nL5N0LH3W6  The temporary decree, published at the end of December while the government works on changes to legislation relating to Sunday working, gave Sunday opening rights to DIY stores until July 1, 2015. Boucher said on Thursday he hoped the matter would be resolved soon as Sunday openings met a real demand from consumers who had free time on Sunday to engage in home repairs and DYI activities. (Reporting by Dominique Vidalon; Editing by Andrew Callus) ((dominique.vidalon@thomsonreuters.com)(+33149495432)(Reuters Messaging: dominique.vidalon.reuters.com@reuters.net)) Keywords: MR BRICOLAGE