Kingfisher, the U.K.-based retail group, has purchased five PriceSmart stores in China for 5 million pounds (US$9.4 million), according to a report by the Independent newspaper.
PriceSmart is franchised from Price Club, or Costco, and Kingfisher plans to convert the stores to its B&Q format next year. Kingfisher already operates 20 B&Q stores in China.
While the B&Q format is the largest home channel retailer in China's fragmented DIY market, Kingfisher appears to be readying for the near future. Last summer Home Depot, the world's largest home channel retailer, revealed it will begin a major push into China.
B&Q reported its first profit earlier this year thanks largely to the Chinese government shelving its Communist housing principles, which has triggered a boom in the nation's home improvement market. For 2003, B&Q's stores in China reported a profit of 400,000 pounds (US$755,300) on sales of 131 million pounds (US$247.4 million).
The acquisition places B&Q in China's west and northeast regions. To date, the retail chain has maintained a strong presence in China's four major eastern cities including Beijing, Shanghai, Shenzhen and Guangzhou.
"This deal enables B&Q to accelerate its expansion in China and to consolidate its position as market leader," said Ian Cheshire, head of Kingfisher's international operations.
