Homebase at Westwood not on list of proposed store closures

Westwood Homebase is secure for now

The Homebase store at Westwood is not earmarked for closure as part of a new restructure plan by the company.

The store reverted back to Homebase less than a year after it had been changed to Bunnings following the sale of the chain by its Australian owner Wesfarmers for just £1.

Wesfarmers paid some £340million for the chain in 2016 but said the investment had been “disappointing.”

It was bought by restructuring company Hilco.

Under the terms of the agreement, Hilco acquired all Homebase assets, including the Homebase brand, its store network, freehold property, property leases and inventory.

A Company Voluntary Arrangement (CVA)  is now being launched with  Homebase seeking approval from creditors on a proposed plan to reduce its cost base in the UK and the Republic of Ireland.

Homebase’s sales performance and profitability declined significantly over the last two years.  The company has faced an extremely challenging retail trading environment reflecting weak consumer confidence and reduced consumer spending. These factors have had a significant adverse impact on Homebase’s trading position.

After a comprehensive review, Homebase has concluded that its current store portfolio mix is no longer viable. Rental costs associated with stores are unsustainable and many stores are loss making.

The CVA means Homebase will cut stores to reduce costs.

Forty-two stores have been earmarked for closure during late 2018 and early 2019 but Westwood is not on the list. Neighbouring Canterbury is set to lose its store.

The cuts will mean up to 1,500 redundancies, although efforts will be made to redeploy team members within the business where possible.

The creditors will vote on the CVA on  August 31.

Damian McGloughlin, CEO of Homebase, said: “Launching a CVA has been a difficult decision and one that we have not taken lightly. Homebase has been one of the most recognisable 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.

“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.”