Homebase mulls more shop closures and job cuts in CVA

HOMEBASE is exploring a second wave of store closures that could see up to 40 DIY outlets shut, putting hundreds more retail jobs at risk.

The DIY chain is sounding out advisers for a potential company voluntary arrangement (CVA), a controversial insolvency procedure that has been adopted by the likes of House of Fraser, Mothercare and Carpetright.

The restructuring would come on top of a store closure programme that the retailer has been carrying out since February. A total of 17 Homebase stores have been shut, with another 23 earmarked for possible closure.

The business also axed 303 jobs at its head office in Milton Keynes this week. Homebase’s next round of restructuring will come after Wesfarmers, its Australian owner, completes the sales of the company to Hilco, a retail turnaround specialist, for £1.

However, it is thought that Homebase’s management is cautious about the prospect of a CVA because the process is so controversial with creditors, especially landlords.

Homebase would have to secure the support of landlords to successfully carry out a CVA.

The property industry has expressed outrage at the process, saying it leaves them out of pocket.

Homebase was bought by Wesfarmers for £340m in 2016, which had plans to convert the stores to its Bunnings format.