Questions as Bunnings’ UK boss, Peter Davis, takes leave

The head of Bunnings’ UK stores, Peter “PJ” Davis, has taken extended leave amid growing rumours of a blowout in losses.

PJ Davis, when he was Bunnings’ COO in Australia. Pic: Peter Wallis

The head of Bunnings’ UK stores Peter “PJ” Davis has taken extended leave amid growing rumours that losses at the division have blown out to $20 million a month.

Mr Davis, the long-time chief operating officer at Wesfarmers’ Bunnings, has taken three months leave, raising questions about the hardware giant’s British arm.

Mr Davis has run Bunnings’ UK and Ireland operations since Wesfarmers (WES) expanded in February last year by acquiring the Homebase business.

New Wesfarmers boss Rob Scott has recently been in the UK.

A JP Morgan research note today highlighted the change, but Wesfarmers’ executives were not immediately available for comment.

Christmas is a strange time for a retailer to take extended leave, even if it is the middle of the UK winter.

But the company says it is a quiet trading time and Mr Davis now has plenty of back-up, led by former B & Q executive Damian McGloughlin, former Coles executive Andy Coleman and former Officeworks executive David Haydon.

Wesfarmers reported a $89 million loss on its UK operations last year and at its AGM the company said losses this year would be larger.

The company paid $800 million for the UK Homebase stores and said it would commit $1 billion in capital expenditure to upgrade them.

It is gradually converting the stores to Bunnings and, reportedly, the new Bunnings stores are doing well but the old Homebase stores are doing very badly.

The reason given for the poor Homebase performance was rapid changes, which had disenfranchised customers.

Bunnings’ first UK store, in St Albans.

Some have suggested the UK operations could turn into Wesfarmers’ equivalent of the Woolworths’ Masters debacle.

This is laughed off by Wesfarmers, but right now the key architects of the purchase are gone, with former Bunnings boss John Gillam having formally left the company and joining the CSR board to become its chair.

Richard Goyder has quit as Wesfarmers chief and is now the chairman of Woodside and the AFL, as well as joining the Qantas board.

Wesfarmers’ former finance chief Terry Bowen has gone into private equity while also joining the BHP board.

Wesfarmers chair Michael Chaney is the continuing link with the Bunnings UK purchase along with Mr Davis who is now on extended leave.