Homebase sees 6.2 per cent sales fall as seasonal gardening sales hit

For the six months to September 1, Home Retail, which also the Homebase DIY/garden centre chain, has reported an underlying pre-tax profit of £18m, down 37 per cent.

Homebase's gardening product sales were down during 2012 - image: Homebase
Homebase's gardening product sales were down during 2012 - image: Homebase


Sales fell one per cent to £2.53 billion.

Homebase reported a 6.2 per cent year-on-year fall in like-for-like sales. Turnover was £787m against £839m and profit was £24.5m against £29.9m for the equivalent period last year.

A highlight was Homebase multi-channel sales penetration increasing by 25 per cent to five per cent of total sales with Reserve and Collect sales growing by 31 per cent, to equal 1.5 per cent of turnover.

Home Retail Group chief executive Terry Duddy said: "Homebase delivered a creditable performance in its peak trading period, given the adverse impact of poor weather conditions on its seasonal product sales and the difficult market conditions in big ticket categories.

"During the first half of the year we took additional action to control costs, tightly managed our working capital and delivered a strong cash performance which has strengthened the Group's financial position.  Market conditions remain fragile and hence we will continue to plan cautiously, however we are in good operational shape as we approach our peak trading period.

"We continue to strengthen our customer propositions in an environment where customer shopping behaviours are changing rapidly, with both businesses improving product choice and delivering further value for our customers."

In July, Homebase launched a refreshed website with a ‘shop by brand’ page created on
the main Homebase website allowing customers to easily navigate and purchase key brands
including Laura Ashley, Qualcast and Jamie Oliver. In October 2012, Homebase launched a web platform for mobile devices. As part of Homebase’s social media development, in May the first ever Homebase Facebook app was launched, allowing the creation of personalised mood boards and enabling customers to ‘ask an expert a question’. Homebase posts on Facebook have been viewed more than 1.5 million times in the period.

Homebase's new store in Aylesford, has led to the new type of propostion being rolled out at Ruislip store at the end of October 2012. The store includes Habitat and
Laura Ashley concessions. Following Ruislip, two further stores are expected to be re-fitted
before the end of the financial year and seven mezzanine refreshes are also planned.
Homebase has continued its programme of garden centre refits, which "incorporate
inspirational garden displays to provide ideas, supported by practical advice from
knowledgeable colleagues". Eleven refits were completed in the period, bringing the total
number to 33.

Over the next five years Homebase has around 65 store lease renewals or break clauses
due. Store profitability will be appraised as each of these fall due and the store network will
be improved by closing, relocating or downsizing some older stores and opening some new
stores if attractive sites become available. In the current financial year, it is expected there
will be around five store closures, but no new store openings are planned.

Now into the third year, Nectar continues to be a key driver of customer loyalty for
Homebase, giving access to 7.2 million Nectar customers. Nectar has a sales participation
rate of over 60 per cent of total Homebase sales.

Over 10 million mailings were made in the period which is an increase of 10 per cent against last year. Homebase further developed a multi-channel approach to promotional events with
online vouchers made available for the first time, prompting improved response rates.
Homebase customers redeemed over 1.7 billion Nectar points in store, an increase of 12 per cent against last year.


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