Joanna Partridge 

Homebase collapses into administration with thousands of jobs at risk

Future of 2,000 staff remains unclear despite the bulk of stores being bought by the homeware retailer The Range
  
  

Homebase store seen from the carpark
Homebase and its parent company, HHGL, made a loss of £85m in the year to January 2023. Photograph: Martin Godwin/The Guardian

The struggling DIY chain Homebase has collapsed into administration, leaving thousands of workers facing an uncertain future, despite the purchase of the bulk of its stores by the owner of The Range homeware retailer.

Gavin Park, Gavin Maher and Adele Macleod from the financial advisory firm Teneo were appointed as joint administrators of Homebase’s owners, HHGL Limited and Hampden Group Limited.

The owner of The Range and Wilko, CDS Superstores, has bought 70 of Homebase’s stores, saving up to 1,600 jobs, as well as the brand and intellectual property.

The Homebase brand will continue to trade online, while the stores bought by CDS will continue to trade until they are handed over, at which point they will be rebranded as The Range superstores.

Homebase had recently completed a sale of 11 of its UK stores to Sainsbury’s, and has exchanged on a further three locations.

The future of the remaining 49 Homebase stores and about 2,000 staff is unclear, although the administrators said they were continuing talks with interested parties.

The administrators said there would not be any immediate redundancies while Homebase’s position was being assessed, adding that they would continue to pay employees’ wage and benefits while they remain in work.

The administrators have pledged to continue to fulfil customer orders as far as possible and said they would put arrangements in place to allow shoppers to use gift vouchers.

Damian McGloughlin, the chief executive of Homebase, said the chain had struggled during the cost of living crisis, while also facing persistently high inflation, global supply chain problems and unseasonable weather.

“It has been an incredibly challenging three years for the home and garden improvement market,” he said. “Against this backdrop, 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.”

Maher said the the administrators hoped to complete sales of additional stores over the coming weeks. “We appreciate that this is a very difficult and uncertain time for all involved. The sale to CDS preserves the Homebase brand and secures a significant number of jobs,” he said.

Homebase has been under pressure to attract shoppers for some time, and its parent group, HHGL, made a loss of £85m in the year to January 2023, from an annual profit of nearly £56m a year earlier, after an 11% drop in sales.

Homebase’s current owner, the turnaround specialist Hilco, reportedly put the chain back on the market this spring, six years after it bought it for £1 from the Australian retail group Wesfarmers in 2018.

At the time of the sale, the chain had about 250 outlets, but has since shrunk to just over 130.

The Homebase chain has had a chequered history since it was created by Sainsbury’s in 1979 and sold off by the supermarket in 2006.

Wesfarmers owned the group for only two years, after what some view as one of the most disastrous UK retail takeovers.

The Range, which operates 210 stores in the UK and Ireland, bought the Wilko brand and intellectual property rights last year, when administrators sold off parts of the 93-year-old retailer, but did not buy any of its stores.

The Range said the acquisition of the Homebase brand would allow it to gain new customers and reach new communities, as part of its owner, CDS’s, plan to double the size of its store estate over the next four to five years.

CDS’s group chief executive, Alex Simpkin, said the stores it had bought would “include everything you’d expect from The Range, combined with much broader choice across garden, showroom and DIY categories – retaining the best of the Homebase expertise and heritage”.

 

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