Homebase is facing administration as it looks to secure its future.
- The DIY retailer plans to appoint Teneo for its UK insolvency process.
- A pre-pack sale is anticipated, with The Range set to acquire up to 75 stores.
- The potential deal could safeguard around 1,500 jobs, but 1,700 positions remain uncertain.
- Hilco Capital had acquired Homebase for £1 and is seeking cost-saving strategies.
Homebase is on the verge of entering administration, a move driven by the need to stabilise its operational and financial status. With Teneo expected to oversee the insolvency process, the intention is to explore strategic outcomes for around 130 operating stores within the UK. This step comes amid ongoing financial difficulties faced by the retailer.
The process in question is aimed at executing a pre-packaged sale of numerous Homebase outlets. The Range, a variety chain, emerges as a strong candidate likely to purchase up to 75 Homebase stores, including those in Ireland. Reports indicate that this acquisition could be finalised imminently, potentially today.
Such a transaction may secure approximately 1,500 jobs, offering a semblance of stability to many employees. However, the fate of an estimated 1,700 additional roles remains precarious, highlighting the ongoing challenges within the retail sector.
Hilco Capital, which holds ownership of Homebase following a purchase valued at £1 in 2018, has been instrumental in outlining multiple cost-reduction strategies due to significant financial losses. For the year ending January 2023, Homebase reported losses amounting to £84 million, a stark contrast to the £30 million profit recorded in the previous year.
During a challenging financial period where sales figures dropped from £788 million to £701 million, Homebase had already initiated discussions with potential investors to secure new investment focused on growth in the home and garden retail sectors. Previously, notable developments included the sale of 10 Homebase stores to Sainsbury’s for £130 million.
The future of Homebase remains uncertain with key developments underway, highlighting the volatility in the retail landscape.
