Nine NI outlets escape Homebase axe as 42 more shops face closure
NORTHERN Ireland’ s nine Homebase stores are not among the 42 outlets marked for closure by the DIY company.
The company became the latest major retailer to resort to a Company Voluntary Agreement (CVA) yesterday, in a bid to cut costs across the UK and Ireland.
While there was some relief for staff across the Northern Ireland outlets, three branches in the Republic look set to close.
The company, sold by its Australian owner Wesfarmers to re- tail restructuring firm Hilco in May for £1, has said it needs to restructure in order to survive.
It has followed in the footsteps of other high street retailers, by seeking a CVA with landlords. The insolvency procedure is used by struggling firms to shut under-performing shops.
It is expected the 42 stores will close during late 2018 and early 2019.
Restructuring firm Alvarez & Marsal has been tasked with carrying out the CVA, which will require the support of landlords.
A total of 17 Homebase stores have already been shut this year and the business has also axed 303 jobs at its head office in Milton Keynes.
Homebase could see some resistance from landlords, who argue the scheme leaves them out of pocket. Recent efforts to introduce a CVA by House of Fraser prompted a major legal action, which was eventually settled out of court. The creditors are due to vote on the CVA on August 31.
Damian McGloughlin, CEO of Homebase, said yesterday that launching the CVA had been a “difficult” decision and had not been 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,” he said.
“The CVA is therefore an essential measure for the business to take and will enable us to refocus our operations and rebuild our offer for the years ahead.”
Stephanie Pollitt of the British Property Federation (BPF), said: “These situations are never easy as property owners need to take into consideration the impact on their investors, including those protecting their investors’ pensioners’ savings, as they vote on the CVA proposal.
“Homebase and Alvarez & Marsal have, however, demonstrated best practice, engaging with the BPF in the process and therefore ensuring property owners’ interests have been properly taken into account.
“Ultimately, it will be for individual owners to decide how they will vote on the CVA, but the proposal has sought to find a solution that provides a sustainable future for Homebase.”