Wolseley announced that it will be
closing about 74 additional Ferguson locations in the second half of its fiscal
year, reducing its employee count by an additional 160. "The majority of
these branches are in markets where Ferguson has other locations that can
service customers," a Wolseley spokeswoman said.
Between July 31, 2008 and Jan. 31,
2009, Wolseley reported a net decrease of 133 in branches in North America.
In response to slowing markets in the first half, Ferguson reduced employee
headcount by 2,067, about 10% of its total workforce. The company said it
will continue to evaluate additional locations for closure in line with market
"Current indications are that
the United States will be the first to recover from the economic downturn
and Ferguson should be well positioned to benefit from this,"
Wolseley said. "As the current downturn continues, the directors
believe that a number of [Ferguson's] competitors will exit the industry,
which should create the opportunity to increase its market share
Wolseley noted that the directors
intend to grow the business with select bolt-on acquisitions when appropriate
and with "new formats and routes to market" such as e-commerce
and an expanded variety of products.
The company also noted the
benefits of integrating Wolseley Canada into the Ferguson business. "Although
Ferguson continued to perform strongly compared to the overall market in the
first half of its current fiscal year, local currency revenue in the U.S.
Plumbing and Heating Division declined by 11.3%, ...with organic revenue down
11.6%," Wolseley said. The company reported that underlying trading
profit, excluding property profits, was down by 21.4%.
"Despite the challenging
conditions, gross margin was marginally up, reflecting internal process
improvement, changes of business mix toward higher margin business
generated from showrooms, counter sales and private label products," the