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* B&Q store closures to cost 350 mln stg
* Closures follow similar move by Homebase
* New Kingfisher CEO updates on strategy
* 2014-15 profit falls 7.5 pct
* Shares rise up to 5 percent (Adds detail, CEO, analyst comment, shares)
By James Davey
LONDON, March 31 (Reuters) - Kingfisher, Europe'sbiggest home improvement retailer, plans to close 60 B&Q storesin Britain over the next two years at a cost of 350 millionpounds ($517 million), saying it has too many shops for the sizeof the market.
New Chief Executive Veronique Laury announced the closure of15 percent of B&Q's space on Tuesday as she set out her visionfor the group, which also trades as Screwfix in Britain andCastorama and Brico Depot in France and other countries.
Britain's home improvement sector is overspaced and lastOctober Homebase, the country's No. 2 player, said itwould close a quarter of its 323 stores by 2018 as Britons hadfallen out of love with home improvement.
"We've known for many years that we have too much space inB&Q ... We have 360 B&Q stores (in the UK) and we have 100Castorama stores (in France) for the same amount of population,"said Laury, who succeeded Ian Cheshire in December.
The announcement came as Kingfisher posted a 7.5 percentfall in 2014-15 profit. It said that while it was encouraged byBritain's improving economy, it remained cautious on the outlookfor France, its biggest market.
Shares in the company, the world's No. 3 do-it-yourself(DIY) player behind U.S. groups Lowe's and Home Depot, have fallen 12 percent over the last year. But they roseup to 5 percent on Tuesday and were the top riser on Britain'sFTSE 100 index of bluechip companies.
"The new CEO's transformation plan sounds promising, and(the) results underline why it is necessary," said RichardHunter, head of equities at Hargreaves Lansdown.
Kingfisher said the B&Q closures would incur the company anexceptional charge of 350 million pounds, mainly related tolease provisions over two years.
JOBS
It did not disclose how much money the move would save thecompany in the longer term. It said it was hopeful there wouldbe little impact on jobs due to staff leaving and redeploymentsto other B&Q and Screwfix stores.
The group is this year opening another 60 Screwfix stores -which are smaller than B&Q outlets, and targeted at the buildingtrade rather than ordinary consumers.
Laury also plans to close a handful of loss-making stores inEurope, develop unified garden and bathroom businesses and starta revitalisation programme for big stores across Europe.
"We need to organise ourselves very differently to unlockour potential," she said.
"This will involve taking what is essentially a locallymanaged set of businesses and creating instead a single, unifiedcompany."
One man who will lose his job is Kevin O'Byrne, CEO for B&QUK and Ireland. O'Byrne, who lost out to Laury for the group'stop job, will leave the business on May 15.
Kingfisher made a pretax profit of 675 million pounds in theyear to Jan. 31, in line with analysts' expectations but downfrom 744 million in 2013-14.
The fall reflected slower sales in France since the summerof 2014, 34 million pounds of adverse currency movements and 22million pounds in charges for entering new countries.
Sales rose 2.9 percent on a constant currency basis to 10.97billion pounds.
Kingfisher ended the year with net cash of 329 millionpounds, is paying a dividend of 10 pence, up 1 percent, andplans to return a further 200 million pounds to investors during2015-16.
On Monday, Kingfisher's proposed purchase of small Frenchrival Mr Bricolage collapsed.
($1 = 0.6766 pounds) (Reporting by James Davey; Editing by Jason Neely and PravinChar)
