Wed, 04 Apr 2018 | BUSINESS SALE
High street DIY chain Homebase is up for sale, after its Australian owner has begun sounding out potential buyers just two years after its ill-fated acquisition of the firm.
Australian giant Wesfarmers bought Homebase in 2016 for £340 million, clearing out the retailer’s management team and overseeing a swathe of changes, but has since failed to turn the struggling chain around – much to the dismay of investors.
Poor performance saw Homebase announce it had lost £97 million in the second half of last year, prompting Wesfarmer’s to revalue its UK business at some £550 million cheaper.
It has been widely reported that Wesfarmers has been approaching potential buyers in the past few weeks, including private equity firms.
In February, investment house Lazard was appointed to conduct a strategic review of the Homebase business. Resulting plans would see up to 40 stores closed and around 2,000 jobs lost.
Rob Scott, the managing director of Wesfarmers, said at the time that he was “keeping all options open” for the Homebase business, including a potential sale.
The Australian firm, which has enjoyed success with its own DIY brand Bunnings, hoped to take on B&Q by bringing all of Homebase’s stores into line with its domestic brand. But by the end of Mach only 22 Homebase retail locations had been converted into Bunnings stores, with 227 unchanged and four closed for conversion.
Alongside trading losses, Homebase’s sales also kicked down 15.7 per cent to hit £517 million over the six months up to December 2017.
Wesfarmer’s directors said that “inconsistent store standards” and “poor execution” of its strategy were to blame for the poor performance. They also said that new product lines had not made up for lost sales from discontinued ranges.
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