Kingfisher - the directors

Kingfisher (LSE:KGF) has a board containing names of the great and the good from the European business world.  When I analysed the company back in 2019 I found that there is no one on the board who learnt his/her trade through Kingfisher trading.  No one who had worked in home improvement or DIY retailing. How, I wondered, are they supposed to know what it’s like to serve customers on the shop floor, drive the vans or share lunch with the lowest employees?
Even now the non-executive part of the board consists of people who are busy running other companies, with keen interests in other industrial sectors, or are the semi-retired.  But they each receive a large remuneration package.
I wondered in 2019 what it must be like for middle and senior managers - having gone through the Kingfisher graduate programme and working their way up - to find that none of their own is considered worthy of adding their voice to boardroom discussion?
A firm needs a managerial cohort in depth.  It needs experienced, wily executives at all levels drawn from a pool of talent that continuously being developed.
When a handful of these “home-grown” people reach the highest levels in the organisation they are far more likely to benefit from the respect of those they work with at lower levels in the organisation.
They know the subtle tricks of the retail game; they know the characters up and down the hierarchy; they know when a plan is feasible or pie in the sky; they know how to play one supplier against another.
Surely, this implicit knowledge and this respect of colleagues is to be valued?   If there are no experienced insiders at or near the top it sends a clear message to aspiring younger managers.  That message is: take your talent elsewhere, the chairman of the board is only interested in those picked from talent pool outside of your industry.
So I was sceptical in 2019 that the newly appointed CEO, Thierry Garnier, could handle this company.  His claim to fame is the building of Carrefour’s Asian business in China, having spent 22 years in Carrefour’s retail empire. The other fresh executive board member, Bernard Bot, brought in to be CFO, had worked in tech, McKinsey and an airline.
Disadvantage overcome
However, the turnaround in the last three years has proved my scepticism ill-founded. They have greatly improved the company’s profits, and steadily grown the business. I’m particularly impressed by their stick-to-the knitting attitude.
They are not coming up with fancy schemes to take over other companies in search of “synergies” or growth. Rather, they keep doubling down on numerous incremental improvements to operations, and as they put it “consistent execution”. For example:

• Improving stock days and availability in peak trading periods
• Lease negotiations are resulting in lower rents. Last year’s 34 resulted in a reduction by over 20% alongside improved lease terms. One-third of B&Q’s leased estate coming up for renewal in the next 5 years
• Rightsizing, e.g. at Canterbury’s B&Q costs are down 33% and it still has strong sales and retention rates
• Multiyear cost reduction programmes to offset inflation
• Optimising stock losses and shrinkage through targeted best practice measures.
• Using their scale to extract value from sourcing and buying.
• Improving forecasting and placing orders significantly ahead of peak trading periods
• Careful management of shipping container costs and availability
• Testing compact stores
• Rightsizing (selling or renting off space) up to 40 stores in UK and France
• Deepening of customer insight through access to daily data collection
• Rolling out self-check out terminals to 110 B&Qs.
• Trialling scan and go.
• Reducing logistics costs in France by about 19%
• Targeting market s......