Homebase is saved ... but 1,500 staff could lose jobs as 42 stores are axed
Homebase is to shut 42 stores – putting 1,500 jobs at risk.
The struggling company is closing them as part of a rescue deal after it emerged that almost three quarters of its 249 stores are losing money.
It has also been forced to beg landlords for rent reductions of up to 90 per cent on 70 other shops. The closures and rent cuts are aimed at saving the 39year-old retailer from collapsing into administration.
The rescue deal, a company voluntary arrangement (CVa), has won more than 95 per cent approval from landlords and other creditors, which includes suppliers such as Crown Paints and Dulux owner akzo Nobel.
It means that more than 200 stores will remain open and more than 9,000 jobs will be saved. but some landlords are threatening legal action which could scupper the restructuring plan.
and mark Williams, president of retail property group Revo, said: ‘The [CVa] process forces property owners, many of which are pension funds investing our money for retirement, to pay for the mistakes of the business owners, and the Government’s failure to reform the business rates system.’
so far this year Homebase has closed 16 shops and axed 303 jobs at its head office in milton Keynes, buckinghamshire. The 42 store closures, in the UK and Ireland, will take place later this year and early in 2019.
Homebase ran into financial problems after a disastrous £340million takeover by australian DIY group Wesfarmers in 2016. It converted numerous Homebase stores to the group’s bunnings brand, alienating loyal customers by taking out popular items such as wallpaper and soft furnishings and replacing them with £500 olive trees and Jacuzzis. before the takeover, Homebase was making profits of around £20million to £40million a year. over the past two years it has lost £300million.
HmV owner Hilco, which bought Homebase for £1 in June, plans to invest £25million to revive it. Homebase chief executive Damian mcGloughlin said: ‘We now have the platform to turn the business around and return to profitability.’