Homebase jobs at risk as up to 40 stores face closure

Wesfarmers, which owns Homebase's parent firm, Bunnings UK, said on Monday that it has booked a £454m non-cash impairment charge on the acquisition of Homebase.

Managing director Rob Scott said: "The Homebase acquisition has been below our expectations, which is obviously disappointing. In light of this, a review of BUKI has commenced to identify the actions required to improve shareholder returns.

"We will take a disciplined approach to further capital deployment in BUKI and provide an update on the outcomes of the business review and our plans for a broader conversion to Bunnings at our Strategy Briefing Day in June."

Wesfarmers said Bunnings UK & Ireland is expected to report an underlying loss before interest and tax of £97m for the first half of the 2018 financial year.

Bunnings group managing director Michael Schneider said: "It is clear that a significant amount of change has been driven through Homebase since the acquisition and the disruption caused by the rapid repositioning of the business has contributed to greater than expected losses across the Homebase network.

"Sales have been affected as non-core categories and concessions were exited ahead of the implementation of the Bunnings format, and investments in price and new ranges have not offset these lost sales. Trading was particularly weak during the latter part of the first half of the 2018 financial year.

"Our focus is on improving the profitability of Homebase through improved ranging and execution in stores, while continuing to develop plans for a broader conversion to Bunnings. The team has been strengthened, including through the addition of strong local expertise, to support improved outcomes."

The company said on Monday that between 20 and 40 stores could be closes due to poor performance.