Homebase announces 42 store closures

Restructuring company Hilco, which bought the DIY/garden centre chain for £1 in May, confirmed it was planning a Company Voluntary Arrangement (CVA).

Homebase, which has 241 stores, said the 42 stores would be shut over the next 16 months.

Chief executive Damian McGloughlin said: "This has been a difficult decision and one that we have not taken lightly.

"Homebase has been one of the most recognisable retail brands for almost 40 years, but the reality is we need to continue to take decisive action to address the under performance of the business and deal with the burden of our cost base, as well as to protect thousands of jobs."

Alvarez & Marsal will carry out the CVA, which will require the support of landlords. Creditors will vote on the CVA on August 31. 

Homebase said rental costs were "unsustainable" and that many stores were loss making in an "extremely challenging" trading environment: "Under the terms of the CVA proposal, all creditors receive a better outcome than any other likely alternative." 

Some 17 Homebase stores have already closed this year and the business has also cut 303 jobs at its head office in Milton Keynes.

The company is also closing its Swindon horticulture buying office, with the loss of around 20 jobs.

Wesfarmers bought Homebase in 2016 for £340m and sold it this year to Hilco for £1.

Hilco is stripping out costs to make the business an attractive proposition for resale, possibly in 2019. If Hilco sells, Wesfarmers will get 20% of the equity uplift.

Steve Pitcher is now running garden buying. More former B&Q staff are expected to join the buying team. Homebase has a market share of about 7% and that is made up of 25% gardening in the season.

Among suppliers to Homebase are Ivan Ambrose, Newey and Florna.

Florna's Ian Howard said the closures were expected and were in Hilco's plan. He said: "It's very sad for those concerned but it was anticipated and of course it is the poor performing stores they're cutting out. From our point of view we've been planning around that from spring onwards. The reserves placed have numbers allowing for that reduction in the estate."

BPOA's Simon Davenport said: "This means the loss of more outlets which can't be a good thing. It's a question of how much will be replaced by other outlets."

Wesfarmers reported full year profits of A$1.19bn ($861.4m) for the year to June 30, a 58% drop, mainly caused by write-offs linked to Homebase. Wesfarmers has said Homebase exit costs were $1.4bn.

Stores closing:

  • Aberdeen Bridge of Don
  • Aberdeen Portlethen
  • Aylesbury
  • Bedford St Johns
  • Bradford
  • Brentford
  • Bristol
  • Canterbury
  • Cardiff Newport Road
  • Croydon Purley Way
  • Droitwich
  • Dublin Fonthill
  • Dublin Naas Road
  • Dundee
  • East Kilbride
  • Exeter
  • Gateshead
  • Grantham
  • Greenock
  • Hawick
  • Inverness
  • Ipswich
  • Limerick
  • London Merton
  • London New Southgate
  • London Wimbledon
  • Macclesfield
  • Oxford Botley Road
  • Peterborough
  • Pollokshaws
  • Poole Tower Park
  • Robroyston
  • Salisbury
  • Seven Kings
  • Solihull
  • Southampton Hedge End
  • Southend
  • Stirling
  • Swindon Drakes Way
  • Swindon Orbital
  • Warrington
  • Whitby

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Sign up now
Already registered?
Sign in
Follow us on:
  • Facebook
  • LinkedIn
  • Twitter
  • Google +
Horticulture Jobs
More Horticulture Jobs

Are you a landscape supplier?

Horticulture Week Landscape Project Leads

If so, you should be receiving our new service for Horticulture Week subscribers delivering landscape project leads from live, approved, planning applications across the UK.