U.K.-based home improvement retailer Homebase plans to close 42 of its 241 stores by early next year, putting at risk more than 1,500 jobs.
The retailer, which already shuttered 17 stores and cut 303 jobs at its head office in Milton Keynes this year, is closing the additional locations via a Company Voluntary Agreement (CVA). This is an insolvency procedure that allows struggling firms to reach a voluntary agreement with their business creditors regarding repayment of all or part of a company’s corporate debts over an agreed period. Restructuring experts at Alvarez & Marsal will carry out the CVA.
The store closures follow the company’s acquisition by Hilco, a retail turnaround specialist, from its former owner Wesfarmers for the nominal price of £1. Australian-based Wesfarmers acquired the retailer in 2016 for approximately $390 million with plans for rebranding Homebase with its Bunnings brand. However, the transition in products did not sit well with UK customers, who preferred the kitchen, bathroom and soft furnishings products previously sold by Homebase over the heavy tools and large barbecues introduced by Wesfarmers.
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“Homebase has been one of the most recognizable retail brands for almost 40 years, but the reality is we need to continue to take decisive action to address the underperformance of the business and deal with the burden of our cost base, as well as to protect thousands of jobs,” said Damian McGloughlin, CEO of Homebase in a statement. “The CVA is therefore an essential measure for the business to take and will enable us to refocus our operations and rebuild our offer for the years ahead.”
