DIY retailer Homebase sold for £1
DIY chain Homebase has been sold by its Australian owner, Wesfarmers, following an onerous two years of trading which cost the brand £1bn. It is being described as one of the worst retail acquisitions ever, with the results clearly illustrating a lack of understanding for the UK DIY market.
Speaking today, Retail Economics consultant Richard Lim was quoted as saying Wesfarmers takeover had been an "unbelievable disaster" stemming from "woeful management decisions, clumsy execution and a misguided perception of the UK market".
When Wesfarmers took control back in 2015, they immediately sacked Homebase's senior management team. Keen to instil an Australian approach to DIY, they introduced no frills DIY sheds and removed soft furnishings which had been a strong part of the businesses revenues for the last ten years. Combined with difficult trading conditions the stores losses started to snowball.
Restructuring specialist Hilco, best known for their rescue of the music chain HMV in 2013 will now take control in an attempt to save the brand. With 11,500 workers across 250 stores, Hilco will need to act fast to stem the financial losses and limit the amount of store closures.
Homebase chief Damian McGloughlin, who will remain with the brand during this transitional period stated: "With Hilco's support we have the commitment of an experienced partner, substantial additional capital, stability for the business and the opportunity to reinvigorate a brand that has been a mainstay of UK retail for over 40 years,"
It will be a tough road back for Homebase, but with Hilco at the helm they have the best chance for recovery.