B&Q owner Kingfisher is to sell a controlling stake in its loss-making China business for £140m as it focuses on its core European market.
Kingfisher, which has 1,176 stores across 11 countries in Europe and Asia, plans to sell a 70 per cent stake in the B&Q operation to Beijing-based retail group Wumei Holdings.
B&Q opened its first store in China in 1999 and now has 39 outlets and employs over 3,000 staff.
However, sales in the country fell by 7.6 per cent to £163m in the first half of this year after the business was impacted by a slowing Chinese property market. The retail loss for the period of £11m included around £2m of costs relating to the trial of a new format.
Kingfisher announced earlier this year that it was looking for a strategic partner to help develop its Chinese business.
Chief executive Veronique Laury, who took over from Sir Ian Cheshire at the start of this month, said the company had found a strong retail partner “who will help us to release the financial value of our business in China”.
She added: “This will enable us to focus our financial resources and management talent on the large and attractive European home improvement market.”
Wumei was founded in 1994 and is one of China’s leading retail chain operators with around 650 supermarkets and 10 department stores.
Kingfisher said it expects the sale to be completed during the first half of next year, if approved by the Chinese Ministry of Commerce.
Last month Kingfisher reported an 11.8 per cent fall in retail profits to £225m for the 13 weeks to November 1 as sales slipped 3.6 per cent to £2.8bn.
Profits in France slumped by 14 per cent to £120m but the figure was up 11.1 per cent to £70m in the UK and Ireland after like-for-like sales rose 2.6 per cent on the back of a stronger British economy and a more resilient housing market.