Homebase on the brink

70pc of stores now in the red Sales have plunged 10pc 11,000 jobs at risk

HOMEBaSE has launched a desperate turnaround plan after almost threequarters of its stores plunged into the red.

Bosses at the ailing home improvement chain want to bring back axed concessions such as laura ashley and Habitat and even introduce new ones such as Carpetright and Pets Corner.

With it fighting for survival, one source close to management said: ‘The turnaround plan will focus on going back to doing what Homebase did best, selling home and garden products and not nine-foot pneumatic drills.’

a new range of wooden furniture went on sale this week and is understood to have proved popular with customers.

a disastrous takeover by australian group Wesfarmers two years ago has left Homebase on the brink of collapse, putting 11,000 jobs at risk.

It was bought by HMV-owner Hilco for £1 in June but still has £116m of debt.

More than 70pc of stores are loss-making, with sales down 10pc across the business in the year to June.

Homebase has lost £300m since Wesfarmers bought it for £340m. Before the takeover, its earnings were £20m to £40m a year.

documents seen by the Mail lay the blame for Homebase’s demise firmly at the door of Wesfarmers. The document’s authors accused the australian group of stripping out popular ranges, scrapping Homebase’s website and replacing existing management with a team with no experience of the UK market.

The bungled takeover saw Wesfarmers convert numerous Homebase stores to the australian group’s Bunnings brand, alienating loyal customers. It axed items such as wallpaper and soft furnishings and swapped them for £500 olive trees and Jacuzzis. Homebase has already closed 16 shops over the past year following the botched buy-out, which has led to hundreds of job losses.

Hilco plans to push through a restructuring plan called a company voluntary arrangement, allowing it to shut 42 of its least profitable stores and get rent reductions of up to 90pc on 70 more. Creditors have been urged to vote in favour of the restructuring deal to save Homebase from collapse. But some creditors have already hinted that they are planning to oppose the CVa which will be subject to a vote at a meeting on Friday.

One said the company was likely to go bust anyway. The source said: ‘I don’t see why people who’ve done right by the company should lose out purely because of mismanagement and a lack of commercial nous.’

However, some creditors are more confident Hilco will lead a successful turnaround considering its track record with HMV.

It managed to keep the musicand-video retailer open and save more than 2,300 jobs. ‘nobody expected that business to remain alive,’ one creditor said.

Hilco and Homebase declined to comment.