Castorama and Leroy Merlin Implement Workforce Reductions
In a significant move reflecting the challenges faced by the DIY retail sector in France, Castorama has announced a voluntary redundancy plan that may impact up to 100 employees at its headquarters near Lille, representing one in seven of its corporate staff. This decision comes as part of a broader strategic initiative launched in March aimed at restoring profitability and maintaining competitiveness in a rapidly changing market environment. The company, which is part of the British group Kingfisher, operates over 95 stores and employs more than 11,000 people across France.
Similarly, Leroy Merlin, a major competitor in the DIY market, has also reduced its workforce, confirming the departure of 130 employees from its headquarters in Lezennes, near Lille. This move aligns with the company's response to declining sales and market conditions. Both companies have emphasized that their redundancy plans only affect headquarters staff, with no impact on store employees.
Declining Sales and Market Challenges
The DIY sector in France has seen a downturn following a boom during the Covid-19 pandemic. According to Kingfisher's latest financial results, Castorama reported a 4.9% year-on-year decline in sales for the third quarter, while its sister brand Brico Dépôt experienced a 3.3% drop. These declines have been attributed to weak consumer sentiment and unfavorable weather conditions, which have dampened demand.
Leroy Merlin's spokesperson noted that the company is also facing a decline in turnover, which reflects broader market trends. The spokesperson pointed to a decrease in real estate transactions and births as significant factors contributing to reduced consumer activity in the DIY sector. Leroy Merlin, which employs approximately 30,000 people and operates 144 stores in France, is part of the Mulliez group, which also owns Auchan. Recently, Auchan announced a substantial social plan threatening 2,389 jobs in France, highlighting the ongoing challenges within the retail sector.
