Homebase, the well-known home improvement retailer, has fallen into administration, putting the livelihoods of around 2,000 employees at risk. The news comes after owner Hilco failed to secure a buyer for the struggling business despite efforts to sell it.
CDS Superstores, the company behind The Range retail chain, has stepped in to acquire up to 70 Homebase stores along with the brand itself, safeguarding approximately 1,600 jobs. However, the remaining 49 shops, and the positions held by thousands of staff, are currently under threat. The administrators, Teneo, have not yet disclosed the locations of these stores.
These shops will continue trading while Teneo seeks a buyer, with no immediate redundancies planned. Along with the physical stores and the Homebase name, CDS Superstores has also acquired the intellectual property associated with the brand. Homebase will continue its online presence, while its physical shops will be rebranded as The Range stores.
Homebase CEO Damian McGloughlin acknowledged the unsettling nature of the news for staff, citing the "incredibly challenging" past three years for the DIY sector. He highlighted factors such as declining consumer confidence and spending following the pandemic, persistent high inflation, global supply chain disruptions, and unseasonable weather as contributing to the company's difficulties. Despite restructuring efforts and attempts to secure investment, these measures ultimately proved unsuccessful.
Teneo joint administrator Gavin Maher described the situation as a "very difficult and uncertain time for all involved" and invited any interested parties to come forward with proposals for acquiring the remaining stores.
Homebase recently sold 11 UK stores to Sainsbury's, with the supermarket chain currently in the process of acquiring a further three. Hilco acquired Homebase in 2018 for £1 from Wesfarmers, following the Australian firm's disastrous foray into the UK market. Wesfarmers had bought Homebase in 2016 and promptly dismissed its senior management team, later admitting to making "self-induced" errors such as underestimating winter demand for essential items and discontinuing popular kitchen and bathroom ranges.
Following its acquisition, Hilco implemented cost-cutting measures, but Homebase struggled as consumers tightened their belts amid the cost of living crisis. The company reported an £84.2m loss last year.
Matt Walton, senior analyst at Globaldata, stated that Homebase had failed to regain its market position after Wesfarmers' ownership, losing ground as competition in the homewares sector intensified.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, observed that the home renovation market had been negatively impacted by consumer belt-tightening in response to high borrowing costs. Despite recent interest rate reductions, homeowners have remained "ultra-cautious," opting to save for holidays instead of DIY projects. However, she noted that consumers have been willing to spend when presented with attractive deals, with B&M and Home Bargains performing well at the "value" end of the market.