The new business, called e-Kingfisher, is to be created at the end of the month. Ian Cheshire, Kingfisher's director of strategy and development, will become chief executive of the new organisation.
E-Kingfisher will invest "significant sums" in the Internet, Wap and digital television, Cheshire revealed. He said the business would act as an "accelerator" to enable Kingfisher's existing brands, which include Woolworths and Comet, to become multi-channel retailers.
Retailers that do not exploit the Internet, interactive technologies and other technologies will lose significant market share, Cheshire warned.
"The new channels are taking all the growth. Bricks-and-mortar stores are standing still," he said. "We are seeing rates of adoption of new technology that are quantum leaps faster than anything in the past."