Homebase revamp hits owner’s profits
THE Australian owner of DIY chain Homebase posted a loss last year after trading was hit by costs linked to an overhaul of the retailer’s store estate.
In the first financial year since acquiring the chain, Bunnings UK booked a £54m loss on revenue of £1.2bn.
The figures come alongside a slowing housing market in the UK following the Brexit vote and after rival B&Q also posted falling sales.
Bunnings, part of retail giant Wesfarmers, snapped up Homebase in a £340m deal last year and has been repositioning the brand.
As well as revamping the stores and slashing prices, Homebase is in the process of being rebranded as Bunnings.
Richard Goyder, Wesfarmers managing director, said: “While significant transition, separation and integration activity was undertaken throughout the year to progress the acquisition agenda, the volume and pace of repositioning Homebase affected store execution and consequently trading performance.”
Five Bunnings pilot stores are now operational and a further 15 to 20 are expected to be trading by the end of the year.
The company’s losses were partially made up of £19m of one-off transition and restructuring costs to establish the brand in Britain and Ireland and opening of pilot stores.
A total of £500m is set to be invested in the UK roll-out over the next five years.
Bunnings UK managing director Peter ‘PJ’ Davis said: “While there is still more work to be done, the team has made good progress in repositioning the Homebase business with a core home improvement and garden offer with ‘Always Low Prices’.”