Homebase reportedly to close 80 stores next week

Troubles DIY chain Homebase was reportedly preparing to announce the closure of up to 80 stores next week, with the loss of about 1,000 jobs.

The loss-making brand, which was bought by restructuring experts Hilco for £1 in a deal agreed in May, was set to file a company voluntary arrangement, a form of insolvency that enables a retailer to exit or alter deals with landlords, UK media reported without citing sources.

The company has already shut 17 unprofitable stores and confirmed plans to close at least another 23. Industry insiders reportedly said those 23 would now be part of a CVA involving between 60 and 80 stores in total.

Homebase was bought after its previous Australian owner, Wesfarmers, bailed out of its foray into the UK having paid £340m two years ago amid much fanfare and plans to convert the 250 stores to its Bunnings brand. It was forced to write off £530m.

Hilco, which rescued music chain HMV in 2013,said earlier this year it would revert the 24 Homebase stores trading under the Bunnings flag across the UK to their original name following the disposal, expected to cost up to £230m.

Perth-based Wesfarmers admitted making several "self-induced" blunders, ranging from underestimating winter demand for items such as heaters and storage products to its decision to discontinue Homebase's popular kitchen and bathroom ranges.

Rob Scott, Wesfarmers' chief executive, said the group had found the UK market to be "very competitive".

Since the rescue by Hilco, Homebase has already cut 300 jobs at its Milton Keynes head office and horticultural buying office in Swindon.