Wolseley Closes 75 Ferguson Branches, Cut Headcount - Modern Distribution Management

Log In

Wolseley Closes 75 Ferguson Branches, Cut Headcount

Wolseley plc, distributor of plumbing and heating products to professional contractors and a supplier of building materials, reported overall that sales for the first nine months ended April 30, 2008, were up 2% and profit fell 23%.
 
As a result of what the distributor called tough market conditions, Wolseley has made further cost reductions in North America since April 30, 2008. The distributor has:
 
-closed 75 branches and reduced headcount by 200 at Ferguson
-closed or consolidated an additional 15 locations in Canada, with a reduced headcount of 50 people
 
Given the continuing tough market conditions, our response has been to take further action to lower the cost base and improve cash flow, while continuing to pursue our longer term strategic ...
Author
Date

Wolseley plc, distributor of plumbing and heating products to professional contractors and a supplier of building materials, reported overall that sales for the first nine months ended April 30, 2008, were up 2% and profit fell 23%.
 
As a result of what the distributor called tough market conditions, Wolseley has made further cost reductions in North America since April 30, 2008. The distributor has:
 
-closed 75 branches and reduced headcount by 200 at Ferguson
-closed or consolidated an additional 15 locations in Canada, with a reduced headcount of 50 people
 
Given the continuing tough market conditions, our response has been to take further action to lower the cost base and improve cash flow, while continuing to pursue our longer term strategic aims,” said Chip Hornsby, CEO. “The cost-reduction actions outlined today will enable us to restructure the business further, so that we are better positioned for the challenges ahead.”  
 
Wolseley reported that in the U.S. housing and repairs, maintenance, and improvement markets have continued to soften but commercial and industrial markets have held up well. In Europe there has been a more pronounced slowdown in the UK over recent weeks and many other European markets have continued to soften.
 
In North America, Ferguson sales grew 1% due to acquisitions. Organic revenue fell 3% and profit was 1% lower than the prior-year period.
 
Stock Building Supply sales fell 25%, and recorded a net loss of $158 million.
 
Wolseley Canada for the first nine months had 2% growth, with profit dropping 15% due to previously announced one-off branch closure costs.
 
In Europe, revenue at Wolseley UK, including Ireland, was up 3% and profit fell 6%. The distributor said that Wolseley UK saw a challenging April as the market slowed “significantly.”
 
Wolseley France sales increased 3% in the nine-month period and profit was 18% lower. Sales in Central and Eastern Europe were up 3% and profit was 50% lower.
 
Further cost-reduction actions will be taken in North America and Europe before the end of the fiscal year, July 31, 2008.
 
Outlook
Wolseley reports that challenging conditions in many markets are expected to continue, although the U.S. commercial and industrial market, which accounts for the majority of Ferguson’s business, is likely to remain stable into the next financial year. The group’s focus on cost reduction is to continue.

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.