Homebase risks 1,500 jobs with planned closure of 42 stores
The owner of struggling DIY chain Homebase is to announce the planned closure of 42 stores, putting 1,500 jobs at risk, on Tuesday afternoon.
The retailer, which currently has 250 stores across the UK, will close the sites through a company voluntary agreement (CVA) carried out by restructuring experts Alvarez & Marsal, conditional on the support of landlords.
Homebase has been carrying out a store closure programme since February, with 17 stores shut and 303 jobs axed at the Milton Keynes head office.
CVAs, which are used by struggling firms to shut loss-making operations, have been adopted recently by retailers including New Look, Carpetright and Mothercare, but have faced resistance from the property industry who argue that it leaves landlords out of pocket.
Current owners Hilco bought the company for £1 from Australian conglomerate Wesfarmers in May, following Wesfarmers' £340m purchase of the chain in 2016.
Wesfarmers had attempted to import its well-known home improvement brand Bunnings to the UK by converting a number of Homebase stores into the Bunnings format.
The Australians also admitted a number of "self inflicted" blunders in its attempts to reverse the chain's fortunes, such as underestimating the demand for heaters in the winter months and dropping popular kitchen and bathroom ranges.
Stephanie Pollitt, assistant director of real estate policy at the BPF, told the BBC: "This will go down in retail history as an example of needing to know the market - retailing is not necessarily globally portable. Chucking out the management was an ill-advised decision."