The UK and France, according to the popular script, are living beyond their means and their citizens must brace for tax rises, spending cuts and all manner of confidence-sapping measures. So it ought to be a horrible time to be a retailer whose biggest market is the UK and whose second largest is France. Throw in a product range that is heavy on kitchens and bathrooms, where a purchase can usually be deferred until next year, and you’ve got a recipe for weak trading, right?
Such thinking was presumably why Kingfisher – owner of B&Q and Screwfix in the UK and Castorama and Brico Dépôt in France – was among the most heavily shorted stocks in the FTSE 100 index by hedge funds going into Tuesday’s half-year numbers. If you want to bet against an economy, or two at once, a large and widely owned DIY retailer is a logical place to start in theory.
