Bunnings has set itself up as a strong competitor through Homebase, after removing an Australian rival.
Wesfarmers, the owners of the Australian hardware chain Bunnings, announced plans to buy UK chain Homebase in January. It bought the 265 store estate for £340m from Home Retail Group, and is now preparing to take on B&Q, the largest home improvement and garden retailer in the UK and Ireland.
The Homebase brand itself is to be remade as Bunnings over the next three to five years, and although Wesfarmers was quick to remove much of Homebase‘s management team, it plans to invest £500m in the business, Horticulture Week reports.
“We will combine essential local elements with the best of Bunnings to bring customers in the UK and Ireland an exciting new home improvement and garden offer,” said Bunnings Managing Director John Gillam.”
“If someone is willing to invest, it‘s got to be a positive thing,” said Homebase Horticulture Category Manager Andy Goddard.
He insisted that Homebase‘s 2016 plans had not changed as a result of the buyout, but that it would be “more of the same” with greater investment.
Homebase should have little reason to worry, if Bunnings‘ performance in Australia is anything to go by. A competitor on Bunnings‘ home turf, Masters, will be forced to either close or be sold as a result of competition from Wesfarmers‘ business. The chain had 150 stores and over 10,000 staff, and had billions of dollars of backing from Woolworths/Lowes.
“The Woolworths/ Masters/ Lowes attempt to tackle Bunnings has now failed despite Woolworths having the money to take them on,” said Leigh Siebler, Australian Garden Centre Association Manager. “Yes, they started too late with Bunnings already being strong, but made a lot of mistakes in my mind. Their garden offer was bad compared with Bunnings or any decent garden centre.”