Posted 8th August

1,000 jobs at risk as Homebase owner looks to cut 60 stores

By KBBDaily on 8th August 2018 - 15:16pm
money matters, homebase, hilco capital, private equity, diy, chain, kbb, kbbdaily, job, loss, store, closing

Hilco Capital – the private equity firm that acquired troubled DIY chain Homebase from Wesfarmers for a nominal amount of £1 earlier this year – is reportedly planning to shut down 60 Homebase stores, meaning at least 1,000 jobs could be at risk.

According to Sky News, citing anonymous sources, Hilco Capital is potentially outlining proposals for a company voluntary arrangement – CVA – which is an agreement with a company’s creditors regarding the paying back of debt.

Sky News added that professional services firm Alvarez & Marsal is expected to launch the CVA early next week, adding that the number of stores potentially being closed down is thought to be in the range of 50-80 including the 18 that have already closed in recent months.

Wesfarmers sold Homebase to Hilco Capital after its £340m investment in the DIY retail chain, made in 2016, became tumultuous. In February this year, the Australian group began looking into the operations of Homebase following its “poor trading performance”.

At the time of Wesfarmers’ divestment of the business to Hilco, managing director Rob Scott said: “The investment has been disappointing, with the problems arising from poor execution post-acquisition being compounded by a deterioration in the macro environment and retail sector in the UK.”

In April, Wesfarmers reported a 13.5% year-on-year drop in sales – reaching £211m – for its Bunnings United Kingdom and Ireland division for the third quarter of the 2018 financial year.

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