Dairygold plans to spend €30 million developing a new chain of branded DIY stores.

It claims the new chain of "4Home"stores will create 600 jobs over the next three years.

The franchise stores should have a combined turnover of €100 million within that period, said Dairygold yesterday.

Dairygold already has a group of 10 DIY/homeware stores and these will now be converted to 4Home stores.

The co-op said the DIY/homeware market was worth about €500 million and growing by 15 per cent per annually.

"4Home will be a quality, modern DIY superstore chain operating to the highest standards of customer service, procurement practices, store design, and category management," said Mr Simon Healy, managing director of 4Home and a former Londis executive.

Mr Healy said Dairygold had spent six months working on the concept, researching the market and developing a consumer proposition.

Under the deal, franchisees will provide sites for the new stores and Dairygold will supply a range of branded homeware goods using a centralised distribution system and information technology (IT) support.

Mr Healy said for many years smaller, independent hardware and DIY retailers struggled to compete against major chains.

"4Home will offer them the opportunity to be able to compete on a level playing pitch in terms of purchasing and marketing power as well as the sophisticated IT systems required of modern retailers," said Mr Healy.

Dairygold has received several expressions of interest from independent retailers already, he said.

Heavy emphasis would be placed on staff training, he said "Our research has revealed that consumers want to visit their local hardware or DIY store as much for advice and helpful hints as for actual purchases," he said.

The first new 4Home store will open in Mallow, Co Cork, at the end of July. Other stores will open in Raheen, Co Limerick, Carrigaline, Co Cork, and Annacotty, Co Limerick.

Mr Florence O'Donoghue, analyst with Davy Research, said he suspected Dairygold's expansion would be focused on towns outside Dublin.

"Interestingly, that is where the likes of Woodies and Atlantic Homecare are now looking to expand as the Dublin market is now pretty well served.

"Woodies is currently at 18 outlets and will open in Naas, Limerick, Navan, and Kilkenny and one other place in the next year or so," Mr O'Donoghue said.

"Atlantic Homecare has plans to open new stores in Tullamore, Wexford and Limerick, bringing the business to 16 stores."

He added: "I suppose it all goes to show the level of interest in the DIY market over here now. The general sense would be that up to recently per capita DIY spend here was around 20 per cent lower than in the UK.

"It is no wonder that so much expansion is occurring," Mr O'Donoghue said.