Homebase to shut another 42 stores as high street misery continues
Homebase has been given the green light to press ahead with a wave of store closures that will see 42 DIY outlets shut, putting around 1,500 jobs at risk.
The retailer is closing the stores via a Company Voluntary Arrangement (CVA), a controversial insolvency procedure used by struggling firms to shut under-performing shops.
More than 95% of landlords to the struggling chain voted to approve the proposal at a meeting on Friday, staving off the immediate threat of administration.
Homebase boss Damian McGloughlin said: “We are pleased that an overwhelming majority of our creditors, including such a proportion of landlords, have supported the plans laid out in the CVA.
“We now have the platform to turn the business around and return to profitability. This has been a difficult time for many of our team members and I am very grateful for their continued support and hard work.
“We can look to the future with great confidence, and we will be working closely with our suppliers to capitalise on the opportunities we see in the home improvement market in the UK and Ireland.”
The firm said it would try to redeploy affected staff.
The latest restructuring comes on top of a store closure programme the retailer has been carrying out since February.
A total of 16 Homebase stores have been shut this year and the business has also axed 303 jobs at its head office in Milton Keynes.
The latest wave of store closures will take place during late 2018 and early 2019.
Restructuring experts at Alvarez & Marsal will carry out the CVA.
Earlier this year, Homebase changed hands when it was sold by its former Australian owner Wesfarmers to Hilco, a retail turnaround specialist, for £1.
Homebase was bought by Wesfarmers for £340 million in 2016.
Wesfarmers is known for its Bunnings chain in Australia, and attempted to import the home improvement brand to the UK by converting a host of Homebase stores into the Bunnings format.
However, the strategy ended in disaster.
Prior to the Hilco takeover, Homebase had 250 stores at its peak and 12,000 staff.
CVAs have been adopted by a host of retailers including New Look, Carpetright and Mothercare, despite the property industry has expressing disdain for the procedure, arguing it leaves them out-of-pocket.