Fears for jobs as Homebase set to close 10 Scots stores

SCOTLAND is set to suffer a raft of store closures by Homebase, losing ten of its 17 DIY shops.

The troubled firm, which was recently bought out for £1, yesterday said it was shutting 42 stores across the UK.

And it warned it could also close up to 70 more outlets unless a rescue deal is struck with landlords and creditors. The move puts hundreds of jobs at risk.

Homebase is the latest retailer to suffer amid tough conditions on the high street, with House of Fraser, Toys R Us, Maplin and Poundworld falling into administration this year.

Homebase’s troubles are in part due to a disastrous two years under the control of Australian DIY chain Bunnings.

New owner Hilco Capital axed 300 back-office staff, slashed costs and revamped the group’s product range in an attempt to lure back shoppers.

But yesterday Homebase claimed a company voluntary arrangement (CVA) was its only chance of survival. This would allow it to close stores and restructure debts.

The Scottish Homebase stores that are to close are: Aberdeen Bridge of Don, Aberdeen Portlethen, Dundee, East Kilbride, Greenock, Hawick in Roxburghshire, Inverness, Glasgow Pollokshaws, Glasgow Robroyston and Stirling.

A spokesman said staff will be redeployed within the business where possible. It was unable to say how many staff will be affected in Scotland.

The Union of Shop, Distributive and Allied Workers (USDAW) criticised the closures.

Stewart Forrest, division officer for Scotland, said: ‘Scotland is losing ten of its 17 stores so the country’s workforce has taken a severe hit and members are extremely disappointed, verging on disgusted, by the way they have been treated.

‘Homebase’s new owners have not been great at includfor ing us in discussion and a lot of staff feel they have been frozen out of talks since the company was sold in May, so this has all come out of the blue for many of them.’ Homebase, which was founded in 1979, has 241 stores, employing around 11,000 staff. The business was bought two years ago by Wesfarmers, the owner of Bunnings, for about £340million.

But the deal turned out to be disastrous and by May this year, with huge losses mounting, Wesfarmers sold Homebase for only £1 to Hilco.

Yesterday, despite slashing costs throughout the business, Homebase said 42 stores would shut.

Another 70 could only be saved if landlords agreed to reduce rent bills, it added.

Its plea came after similar rescue deals were struck by other retailers, including New Look, Carpetright and Mothercare to stave off collapse.

If Homebase’s CVA is agreed, store closures would be expected towards the end of this year or in early next year.

The company has closed 17 stores across the UK this year and axed 303 jobs at its head office in Milton Keynes.

Homebase blamed rent costs making many of its stores loss-making. Damian McGloughlin, Homebase chief executive, said: ‘We need to continue to take decisive action to address the underperformance of the business and deal with the burden of our cost base, as well as to protect thousands of jobs.

‘The CVA is therefore an essential measure and will enable us to rebuild our offer for the years ahead.’

Mandeep Singh, a former retail consultant and boss of website Trouva, said: ‘Shoppers are increasingly either willing to pay a little bit more for a premium experience, or will trade down to discount retailers.

‘Unfortunately Homebase was stuck in the middle, offering a bad experience, a poor product selection and price points that weren’t competitive.’