Homebase cuts 300 jobs, more store closures loom

Base is a reduction of 300 jobs at its Milton Keynes head office, amid speculation that up to 80 stores will close after its takeover by restructuring specialist Hilco.

Loss-making DIY chain was bought by the owner of HMV for $ 1 in a deal agreed in may after its previous Australian owner, Wesfarmers, gave up on the “failing company” in the UK.

Wesfarmers, which bought the business for £340 million two years ago shifted the entire 250-store chain homebase, which has slightly more than 11,000 people, ditching the plan to turn them into Bunnings brand.

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Said homebase a third of its head office staff resigns in November, as she focused on his brand of DIY. In all 24 stores renamed Bunnings will again Homebase outlets.

Damian McGloughlin, Executive Director of Homebase, said: “We made this decision was very difficult, but decisive action is required to begin to restore the position of the fixed on the UK market. We will provide as much support as we can to help those affected at this difficult time”.

The reductions come amid speculation that she is considering a company voluntarily, a form of insolvency that will allow you to close up to 80 stores and renegotiate leases with landlords.

The company has already closed 17 unprofitable stores and has confirmed plans to close at least another 23. Industry insiders said that CVA associated between 60 and 80 stores were one of the options being considered by the new owner of it.

The failed Australian the acquisition of registry is one of the most disastrous acquisitions in the retail, along doomed the expansion of Tesco into the US market with a fresh and easy grocery chain.

Wesfarmers had intended to spend £500 million giving a chain of homebase facelift, turning it into a British version of its successful Australian DIY chain, which is famous for low prices and the sausage sizzles.

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However, in a tough UK market hit a slowdown in home buying, Bunnings tried to find a foothold amid tough competition from rivals such as B&Q, Argos and Wickes. The company expects a loss of nearly 100 million pounds in the first half of this year.

Difficulties in homebase in part caused by the decision to discontinue the sale of the house with furniture and to remove popular concessions, such as habitat and Argos. But they also reflect wider problems in the retail sector in the UK, which led to mass closure of chains, including New look, carpetright website and mothering.

In March, rival DIY at B&Q, which is owned by Kingfisher, said that sales fell by 5.1% and profit for the year to the end of January fell 10% to £682m.

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Retailers everywhere are struggling as the falling value of the pound pushes up the cost of purchasing goods abroad, along with raising the minimum wage and business rates of changes. The growth of online shopping, income at traditional retailers who have to invest in the infrastructure delivery of home and while facing new competition from online specialists.

These structural changes occur as buyers cost optimization due to the uncertainty caused by the withdrawal of great Britain and a shift towards rent and not own a home.

If she makes attempts CVA, he may face negative reactions from landlords, who have complained in the store house of Fraser for the planned closure of more than half of the 59 stores. CVA has received permission last week, but some tenants are considering challenging the vote, to move within 28 days after its passage.

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