Another victim of China's real estate slump:
Kingfisher, a large british DIY retailer (it also has a stake in Germany's Hornbach Baumärkte), reported sharply lower sales in the financial year ended 1/09: China revenue was down 24 %.
Quotes from the press release:
"...the dramatic housing market slowdown has impacted performance and exposed internal operational issues that have exacerbated the impact of the market slowdown on reported losses ... ambitious expansion in recent years had been too fast, resulting in a rump of loss making and oversized stores. The business had become too reliant on a booming apartment design and installations market ... The plan encompasses rationalising the store portfolio from 63 to 41 and revamping the remaining stores, 17 of which will also be downsized ... An accounting write off of £107 million has been booked in 2008/09 ..."
Of course it's possible (and even admitted to some extent in the investors presentation) that Kingfisher had simply mismanaged its China expansion, i.e. didn't offer the customers what they wanted. But it does sound like they were caught on the wrong foot by massively lower demand for home furnishing products... In any case: Yet another ambitious foreign investor that got burnt trying to profit from China's limitless business potential...
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