Homebase puts 1,500 jobs at risk as it closes 42 stores under CVA insolvency

HOMEBASE plans to shut 42 of its 241 stores as part of a drastic turnaround plan that could leave as many as 1,500 workers out of a job.

The ailing DIY retailer said it needed to close the shops to hack away at “un- sustainable” rent costs after a slump in sales and profitability under its former owner, Australia’s Wesfarmers, and amid tough times on the high street.

It plans to carry out the closures towards the end of this year and in early 2019 through a company voluntary arrangement (CVA) insolvency process, which will need the approval of its landlords and creditors in a vote at the end of August.

Homebase said the closures were expected to lead to about 1,500 job cuts but insisted “every effort will be made to redeploy team members within the business where possible”.

It has already closed 16 stores this year and cut 300 jobs at its head office in Milton Keynes.

Damian Mcloughlin, chief executive, said the decision to pursue a CVA hadn’t been taken lightly, “but the reality is we need to continue to take decisive action to address the underperformance of the business, as well as to protect thousands of jobs”.

Homebase’s current owner, turnaround specialist Hilco Capital, bought it for £1 earlier this year after a disastrous spell under Wesfarmers.

Wesfarmers owns several of Australia’s largest retailers and had attempted to rebrand Homebase’s stores under its own Bunnings Warehouse brand.