Home­base sold for £1 as DIY dis­as­ter ends for Wes­farm­ers

The Malta Business Weekly - - FRONT PAGE -

The Aus­tralian owner of Home­base has sold the DIY chain for £1, end­ing its dis­as­trous foray into the UK.

Wes­farm­ers paid £340m for the re­tailer two years ago, but losses and other costs will bring its to­tal bill to about £1bn.

The chain is be­ing bought by re­struc­tur­ing spe­cial­ist Hilco, which res­cued mu­sic chain HMV in 2013.

The 24 stores that had been con­verted to the Bun­nings brand will re­vert to the Home­base name.

Richard Lim, of con­sul­tancy Re­tail Eco­nom­ics, said the Wes­farm­ers takeover had been an "un­be­liev­able dis­as­ter" due to "woeful man­age­ment de­ci­sions, clumsy ex­e­cu­tion and a mis­guided per­cep­tion of the UK mar­ket".

He ex­pected the re­struc­tur­ing would re­sult in store clo­sures and more job losses on the High Street. Home­base has about 250 stores and 11,500 work­ers.

Dave Gill, na­tional of­fi­cer at shop­work­ers' trade union Us­daw, said: "Staff in Home­base stores are ex­tremely wor­ried for the fu­ture af­ter com­pany's own­er­ship changes hands yet again.

"Clearly the sale for just one pound is very dis­turb­ing. I am in touch with the com­pany and we are seek­ing ur­gent meet­ings to se­cure jobs."

Wes­farm­ers has ad­mit­ted mak­ing a num­ber of "self-in­duced" blun­ders, such as un­der­es­ti­mat­ing win­ter de­mand for a range of items from heaters to clean­ing and stor­age, and drop­ping pop­u­lar kitchen and bath­room ranges.

Rob Scott, chief ex­ec­u­tive of Wes­farm­ers, said the UK mar­ket proved to be "very com­pet­i­tive", with "quite chal­leng­ing" re­tail con­di­tions.

Asked whether in­vestors could trust Aus­tralia's big­gest re­tail group with fu­ture ac­qui­si­tions, he said he hoped the dis­posal "demon­strates the ca­pa­bil­ity of our team to act de­ci­sively".

Wes­farm­ers ex­pects the dis­posal to cost up to £230m. It will be en­ti­tled to 20% of any fu­ture sale of the busi­ness.

Home­base chief Damian McGlough­lin, who will stay on as part of the man­age­ment buy­out funded by Hilco, "marks an ex­cit­ing new chap­ter" for the re­tailer.

"With Hilco's sup­port we have the com­mit­ment of an ex­pe­ri­enced part­ner, sub­stan­tial ad­di­tional cap­i­tal, sta­bil­ity for the busi­ness and the op­por­tu­nity to rein­vig­o­rate a brand that has been a main­stay of UK re­tail for over 40 years," he said.

Hilco was given a "Turn­around of the Decade" award last year for its re­vival of HMV.

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