Wickes owner Travis Perkins to sell plumbing and heating division and make cost cuts amid continued DIY decline
- Travis Perkins is targeting cost savings of between £20million and £30million
- Cuts are expected to affect the firm’s ‘above branch’ and distribution cost base
- Plumbing and heating division on sale to focus on trade customers
Travis Perkins is to put its plumbing and heating division up for sale and cut costs further as it looks to shifts its focus to trade customers instead of DIY.
The group, which owns DIY chain Wickes, said it is targeting cost savings of between £20million and £30million, which are expected to affect the firm’s ‘above branch’ and distribution cost base.
This comes with Travis Perkins already having slashed its head office workforce by a third in May, when it launched the hefty cost-cutting programme.
Cost cutting drive: The group is targeting cost savings of between £20million and £30million
The firm said its decision to sell its plumbing and heating division will allow it to focus more on trade customers as demand for DIY products keeps declining, amid weakness in the housing market and consumer confidence on the back of Brexit uncertainty.
It also said it will ‘look to review the options for maximising the value’ of Wickes in the medium term, implying a possible sale of the DIY chain.
Travis Perkins shares fell 1 per cent to 1,088p in morning trading.
‘In the shorter term, market conditions remain uncertain, impacting secondary housing market transactions and consumer confidence,’ the group said in a statement.
And added: ‘Following a comprehensive review, the Board has concluded that the Group will focus on serving trade customers through advantaged businesses in attractive markets, and will simplify the group to reduce complexity and cost to drive returns.’
It comes as last month the group said sales at its retail division tumbled 4.2 per cent in the third quarter, driven by disappointing sales of kitchens and bathrooms.
At the time, Boss John Carter said: ‘The UK DIY market continues to be very challenging for Wickes, where significant price pressure and weak consumer confidence is providing a tough trading backdrop.
‘Across the group, we are making good progress with the cost reduction activities that were highlighted in July, and these actions are generating positive results and underpin our confidence that our full-year performance is on track and in line with market expectations.’
Wickes’ main rivals, B&Q and Homebase, have also struggled with falling sales of late as fragile shopper sentiment and a subdued property market takes its hold on the DIY industry.