* Government spending cuts bring clarity to shoppers, firms
* Reasonable to see UK DIY mkt flat to down 5 pct in 2011
* France more resilient, Poland improving, Turkey strong
* No M&A on horizon, but interested in closer Hornbach links
(Adds quotes, background)
By Mark Potter
BERLIN, Oct 27 (Reuters) - Kingfisher Plc
Ian Cheshire also told Reuters in an interview at the World
Retail Congress on Wednesday he would be happy to contemplate a
closer relationship with German joint venture partner Hornbach
"The first six months of next year will be very difficult," he said of Britain, where Kingfisher runs market leader B&Q.
"But in terms of the second half and the exit into 2012
there are reasons to be more optimistic," he added, echoing
comments from Stuart Rose, chairman of British retailer Marks &
Spencer
"There will be periods of sogginess ... but fundamentally I think we've past the real trough. We're now into slightly more do-able territory from a retail point of view, in terms of being able to play the pitch that's in front of you," said Cheshire.
He added it was reasonable to assume Britain's home improvements market would be flat to down 5 percent next year.
France, where Kingfisher runs the Castorama and Brico Depot chains, was more resilient, while Poland was improving, though not growing fast, and Turkey had bounced back strongly from the global economic downturn, Cheshire said.
China, where the government has been taking steps to cool the housing market, was turbulent, but the firm's business there was still on track to break even next year, he said.
GROWTH PLANS
Kingfisher, which has been cutting costs and buying more goods directly from cheaper manufacturing centres like China to boost profits despite sluggish sales, is due to announce the next stage of its recovery plan in March.
Cheshire said the group, which runs 840 stores in eight countries, would look at expanding into new markets in eastern Europe and the Middle East with franchise partners.
However, this was two to three years away as the group was only just launching a range of about 3,000 products common to all its formats and it would want to bed this in and grow it to about 5,000 as a prelude to any franchise deals.
Mergers and acquisitions were not on the horizon, although the group was always on the lookout for parcels of stores in its existing markets, Cheshire said.
He also said he was happy to contemplate a closer relationship with German home improvements group Hornbach, in which Kingfisher owns a 21-percent stake.
He declined to say what that might involve and said it would depend on the wishes of Hornbach's controlling family. (Editing by David Holmes)