Bunnings UK reports plummeting sales as it continues to strain Wesfarmers

Bunnings UK has continued to act as a strain on its owner Wesfarmers as it reported plummeting sales amid its third-quarter results.

During the period Bunnings UK reported a total sales decline of 13.5 per cent to £211 million, alongside a like-for-like sales drop of 15.4 per cent.

The picture was the same for the financial year to date, which saw sales drop 14.7 per cent to £726 million, and a like-for-like sales decline of 13.9 per cent.

This compares to a strong performance in its native Australia and New Zealand, which rose 8.9 per cent to $3 billion for the quarter, with like-for-like sales rising 7.7 per cent.

Although the group attributed the UK’s poor performance to “unusually poor weather in March resulting in a decline in total sales”, its UK operations are undergoing more widespread troubles.

Following Wesfarmers’ £340 million acquisition of Homebase in 2016, it has been undergoing a large-scale rebrand to its Bunnings fascia.

This interjection into the country has backfired spectacularly with Wesfarmers announcing £584 million in write-downs earlier this year, alongside warnings that its half-year losses would nearly triple to £97 million.

The group is now looking increasingly likely to offload its UK estate. Having flown in Lazard to help sound out potential buyers, it was revealed earlier this week that it could offer a £100 million dowry to sweeten the deal.

Over the quarter a further eight pilot stores were opened while seven stores closed. Its estate was comprised of 227 Homebase stores and 23 Bunnings stores as of March 31.

“Retail execution standards lifted in Homebase in preparation for spring and stores are well-positioned for the arrival of the season,” director Michael Schneider said.

“Refinement of the Bunnings format is ongoing with recent conversions reflecting updated range plans.”

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