Homebase owners could be considering £100m dowry

6743
Homebase

Wesfarmers has asked potential bidders for its Homebase chain to submit initial takeover bids today.

According to Sky News, the bidders could be enticed with a huge dowry for the business, as Wesfarmers looks for a speedy exit out of its role as Homebase’s parent company.

Sources close to Wesfarmers have said the business is putting together a large financial package to hand to any new owner, to help content with Homebase’s losses.

Although the value of the dowry has not been finalised, it is thought it could easily exceed £100 million.

Wesfarmers acquired the DIY chain in 2016 for £340 million.

Homebase has since reported a £97 million trading loss for the second half of 2017, with Wesfarmers forced to write-down the value of its UK business by £550 million.

The UK retailer is now expected to lose approximately £190 million in the current financial year on revenues of roughly £1 billion, according to sources close to the business.

Sky News reported that restructuring specialist Alvarez & Marsal has been drafted in to advise Wesfarmers on alternatives to a sale, including a mechanism that would see it closing scores of Homebase outlets.

A Company Voluntary Agreement could also be on the cards.

The news comes as Homebase enlisted the help of specialist consultancy firm Boston Consultancy Group as Wesfarmers looks to abandon its accession in the UK.

Click here to sign up to Retail Gazette‘s free daily email newsletter

2 COMMENTS

  1. Homebase has an identity issue in the do it yourself sector, as it is trying to please the soft furnishing client and the Do it yourself Client but the Do it yourself sales area is much smaller. So with online soft furnishings storming ahead its no surprise they have large losses.

    • Seems you have not stepped into a Homebase since Wesfarmers took over Philip. They have taken out Homebase lines and the soft furnishings and had a half arsed attempt at turning it into a DIY store with Unknown brands at unknown quality and without any attempt to attract new customers.

      The Bunnings stores opened seem to be really nice but I fear they changed Homebase too quickly into a halfway house between Bunnings and Homebase.

      Any new owner will need funds to return Homebase into the brand and store that it should be.

LEAVE A REPLY

Please enter your comment!
Please enter your name here