Homebase store closures put 2,000 jobs at risk

UP TO 2,000 jobs are at risk at Homebase as the troubled DIY chain prepares to unveil a sweeping overhaul that is likely to see 60 stores axed.

Homebase will next week detail plans to close between 50 and 80 stores through an insolvency process known as a company voluntary arrangement (CVA), although the number of stores set to be shut is understood to be around 60. The CVA is being pursued by owners Hilco Capital, which snapped up Homebase for £1 from Australia’s Wesfarmers in May.

Homebase, which has an estate of 249 stores and employs 11,000 staff, will use the CVA to close underperforming sites and secure deep discounts on rents.

Restructuring specialist Alvarez & Marsal is understood to be handling the process. It is the latest bout of bad news to hit the high street following a wave of store closures and job losses.

Analysis by The Daily Telegraph has estimated that 1,334 shops have been shut or earmarked for closure since January, putting 23,400 jobs at risk.

Maplin, Toys R Us and Poundworld have already collapsed, while Mothercare, Carpetright and House of Fraser are all using CVAS to close stores. Homebase was bought by Wesfarmers from Home Retail Group for £340m two years ago.

It attempted to reboot the retailer by rebranding the chain as Bunnings. But the move backfired badly.

Hilco bought HMV in 2013 and secured its future by shrinking its retail presence.

Homebase reported that like-for-like sales, which strip out new shops, fell 15.4pc during the first three months of the year.