Homebase narrows losses after store closures under new owner
Homebase narrowed its losses in the second half of 2018 as a turnaround plan under new owners starts to show signs of progress.
The DIY and garden centre retailer shut 47 outlets last year as part of a restructuring programme after it was purchased by Hilco for £1 following a disastrous spell under the ownership of Wesfarmers.
On Wednesday the firm said that its turnaround is on track and the group has made significant progress, after cutting costs by £100 million.
Operating losses improved by 79.1% to £39.1 million in the half-year to December 30 2018, which compares to a £187.3 million loss in the same period of 2017.
Costs were heavily reduced through a restructure of its head office, where roles were cut by 38%, alongside a Company Voluntary Arrangement (CVA), which allowed Homebase to close loss-making stores and secured rent-reductions for a further 70 sites.
It also closed two of its six distribution centres, and secured a £95 million lending facility from Wells Fargo.
However, sales slipped 3.5% to £497.8 million, from £515.6 million in the same period the previous year.
During the half-year, the retailer reintroduced popular ranges such as furniture, brought back in-store concessions and laid the foundations to rebuild its digital offer, Homebase said.
Positive momentum from the changes has continued into the current year and the business is now well placed for the key spring and summer trading period, it added.
Damian McGloughlin, Homebase chief executive, said: “The benefits of the changes we have made are starting to come through and I am extremely grateful for the loyalty, energy and support we have received from our team members and suppliers.
“Clearly, we are only 10 months into a three-year turnaround plan.
“Homebase remains one of the most recognisable retailers in the UK and Ireland, and the progress we have made in reinvigorating our customer experience means we are very optimistic about the future.”
Hilco purchased the company in June 2018 for £1 from Australian group Wesfarmers, whose attempts to import its Bunnings home improvement brand to the UK by converting Homebase stores to its Bunnings format failed dramatically.
Wesfarmers had bought the chain for £340 million in 2016.
Prior to its Hilco takeover, Homebase had 250 stores at its peak and 12,000 staff.