Group turnover: 12,134 million (B&Q is part of Kingfisher)
International development director: Steve Gilman
International HR controller: Alan Hodgson
If youre one of those people who complain that all high streets now look the same, you should seriously consider scrubbing China from your list of places that will be completely different. For the Yangpu district of Shanghai is about to get a B&Q.
And its not any old DIY store either. It will be the biggest B&Q in the world when it opens in July, and its the latest in the chains expansion in the Far East. It already has two other stores in Shanghai as a complement to its eight in Taiwan. The new Yangpu store, however, will be on two floors and come complete with a travelator and a huge video wall which will screen advertisements for products and promote whats available upstairs.
B&Qs Chinese expansion is pushing the frontiers of retailing. Margins are low in China, so it has had to find other ways of maximising profits. One method is to sub-let buildings, another to make vendors pay to have their branding in the stores. Branding makes an important contribution to the overall margin, says Steve Gilman, international development director.
B&Qs buying contract contains 60 headings. We negotiate every one of those 60 headings, says Gilman. Our first contract had four headings, the second had 15 or 20. Now we even negotiate how much were paid for the space vendors have on a shelf or what they give us for having a promotion special on a national holiday... B&Q has, incidentally, run a negotiating skills course for its buyers.
Nor has B&Q been slow to borrow good ideas from other retailers, the Yangpu stores Container Shop owes a debt to the USs Container Store and the furniture section will have a mini Ikea feel to it. The new superstore also promises a bit of retail theatre as B&Q China will sell fabrics and have employees sewing in the shop.
B&Qs Chinese stores have more staff on the floor than in the UK and probably gives better service than we do here says Gilman. B&Q is upper quartile in terms of salaries in China but this is partly accounted for by 75% of workforce being graduates as they want to work for Western companies. But the staff do face labour-intensive tasks. Very few products are barcoded in China and many products arrive in huge bags which are then broken up and split into smaller bags for resale.
And employee relations have posed problems too. A tricky HR situation occurred when a fork-lift truck driver crashed into a wall. The Chinese way to deal with this is to name and shame the individual. However, the Western bosses felt this was not the B&Q way to do things, but had to find a middle way so as not to rob local managers of their independence and authority.
And the few expatriates out there pose their own problems which range from the obvious one of trying to find jobs for them with the same amount of challenge when they return to the UK to having to find a new international school for employees children when their existing school is taken over by a new head from Americas Deep South whose views on evolution are not quite in tune with Darwin.
Its all a far cry from 1969 when Richard Block and David Quayle put their initials over a small DIY store in Southampton. Both have left the company but are said to be fascinated by the thought of their initials over stores in China.
