LONDON (Reuters) – British home enchancment retailer Homebase stated on Tuesday it deliberate to shut 42 shops, placing 1,500 jobs in danger, with new proprietor Hilco Capital in search of to cut back its value base in a brutal buying and selling atmosphere.
FILE PHOTO: A gross sales assistant tidies up a shelf of paint at a Homebase retailer in Aylesford, Britain, May 1, 2013. REUTERS/Luke MacGregor/File Photo
Hilco acquired the struggling chain from Australian group Wesfarmers for a nominal 1 pound in May.
Homebase stated the proposed closures type a part of a so-called Company Voluntary Arrangement (CVA) restructuring, permitting the business to keep away from insolvency or administration.
A string of British retailer teams have both gone out of business or introduced plans to shut retailers this 12 months, as they wrestle with subdued client spending, rising labour prices, increased business property taxes and rising on-line competitors.
CVAs have been adopted by a string of British retailers together with vogue chain New Look, ground coverings group Carpetright and mother-and-baby items agency Mothercare.
“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,” it stated.
“The CVA enables Homebase to make essential changes to its store portfolio, reducing its cost base and providing a stable platform on which to continue its turnaround.”
Creditors will vote on the CVA plan on Aug. 31.
The 42 shops in Britain and Ireland are set to shut throughout late 2018 and early 2019. Homebase presently trades from 241 shops in Britain and Ireland, using 11,000.
Homebase stated employees could be redeployed inside the business the place doable.
Homebase was bought by Wesfarmers for 340 million kilos ($434 million) in 2016 however it proved a disastrous funding.
Reporting by James Davey, Editing by Paul Sandle and David Evans