Homebase is reportedly looking at the possibility of launching a CVA that could see up to 40 stores shut and hundreds of staff be made redundant.
According to the Press Association, the embattled retailer, which was recently sold to restructuring specialist Hilco Capital for just £1, is hunting for advisors for a potential CVA.
It is understood that Alvarez & Marshal have been contacted by the DIY retailer to explore the insolvency procedure, alongside other options.
Homebase’s management are thought to be cautious of the plans for a CVA, which has recently proved a contentious issue with landlords who often have to foot the bill for failing retailers.
This comes just a day after it announced 303 job cuts at its head office in Milton Keynes, representing around a third of its staff at the location.
Its current financial woes follow a disastrous £340 million acquisition by Australian retail conglomorate Wesfarmers in 2016.
In an attempt to rapidly convert Homebase’s UK estate into its Bunnings fascia and crack the UK market, Wesfarmers recorded a loss of between £200 million to £230 million.
The CVA would come on top of a store closure programme that it has been undergoing since February, and which has already seen 17 Homebase stores shut and 23 more earmarked for possible closure.
Reports have also emerged that between 80 and 100 of Homebase’s 150-strong store estate could now face the axe – significantly bigger than Wesfarmers’ original plans to close down between 20 and 40 underperforming stores.
The £1 sale now complete, Hilco is in the process of converting all 24 Bunnings stores back into their original Homebase fascia.
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