Following a recent interview, Home Retail Group, the parent company of Homebase and Argos, has announced it will be closing 25% of Homebase stores by 2019.
The company believes a group of its other 323 stores are “unprofitable or in decline” with seven stores having already stopped trading.
Plans are now in place to close another 23 stores before the end of March 2015.
Home Retail Group, which also owns Argos, reported pre-tax profits of £13.5m for the six months up to the end of August.
This is 5% down compared to this time last year. John Walden, Chief Executive of the Home Retail Group, cited the cause of Homebase’s decline saying: “It’s the younger people, people who are time starved, who are more likely to look for a third party to help.”
The home and general merchandise retailer warned in 2012 that Homebase would be closing stores but at that point, they were unclear how many would close.
The in-house review of all of Homebase’s stores found that there were “inconsistent store operating standards” across the company.
Walden believes the three year plan to improve productivity “will position Homebase as a smaller but stronger business, ready for investment and growth”.
City analysts are uneasy on Home Retail Group’s future.
“Home Retail is today further underlining the rebalancing taking place by the retail industry away from the High Street and towards online sales” said Keith Bowman from Hargreaves Lansdown stockbrokers.
“While the relatively new chief executive continues to embrace change, the depth of transformation at the company does heighten investor nerves, near- to medium-term” he added.
As part of its restructuring plan, 26 Homebase stores have been refitted, which the company says has lead to sales growth in those areas.
Despite these positive signs, Home Retail group has no plans to refit all the Homebase stores.