More than 1,500 jobs of a workforce of more than 3,000 could be saved at struggling DIY retailer Homebase after reports suggested that The Range’s billionaire owner Chris Dawson is in talks to acquire around 70 stores in the UK and Ireland.
Homebase has grappled with rising energy and labour costs since the pandemic, and a drop in demand as consumers reined in DIY projects because of the cost of living.
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Its owner, Hilco, which has successfully turned around HMV, acquired the DIY chain in 2018 from Australian retail giant Wesfarmers for £1 under a company voluntary arrangement, resulting in the closure of a substantial number of stores and renegotiated rent deals.
It is understood that Wells Fargo bank would not extend a £95 million credit facility that expires next month.
Administrator Teneo said on Wednesday the sale was expected to secure the jobs of about 1,600 of Homebase’s total workforce of 3,600 across its head office and stores.
Dawson told The Telegraph: “We are delighted to be able to save so many stores and jobs, and look forward to adding the Homebase brand and subsidiaries to the expanding Range group of companies.”
In August, Sainsbury’s announced it was acquiring the leases on 10 Homebase sites for conversion to new supermarkets. Homebase was launched in 1979 by Sainsbury’s before being divested in 2006.
CDS Superstores, The Range’s parent company, is also looking to buy Homebase’s brands and its online business.
Homebase CEO Damian McGloughlin said his company had suffered a decline in consumer confidence and spending since the Covid pandemic and that this had been exacerbated by the impact of persistent high inflation, global supply chain issues and unseasonable weather.
“We have taken many and wide-ranging actions to improve trading performance, including restructuring the business and seeking fresh investment. These efforts have not been successful and today we have made the difficult decision to appoint administrators,” he said.
Homebase’s collapse would follow the recent demise of Carpetright, Paperchase and Wilko. CDS also bought Wilko’s brand when it collapsed last year, but did not buy any stores.
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