More than 70 per cent of Homebase stores are now losing money following the disastrous takeover attempt by Australian conglomerate Wesfarmers.
According to the Financial Times, in a document the home and DIY retailer prepared for its creditors it explained that more than two in three stores are in the red, while laying out a three-year turnaround strategy.
It also warned that should its CVA, which is due to be voted on by creditors next week, was not approved “it is very likely Homebase will go into administration or liquidation”.
The CVA is set to see 42 of its 249 stores close, and between 25 and 90 per cent rent reductions secured on another 70.
It has also proposed new funding of £25 million from its new owner Hilco and up to £116 million of debt.
Several landlords have already expressed their opposition to the CVA, with one telling the Financial Times: “I cannot see any upside for me in supporting this CVA.
“I don’t see why people who’ve done right by the company should lose out purely because of mismanagement and a lack of commercial nous.”
The home and DIY retailer’s financial woes come after the Australian retail conglomerate Wesfarmer’s short-lived attempt to use it as a springboard into the UK market.
After purchasing the company in 2016, Wesfarmers began to convert Homebase stores to its Bunnings fascia, resulting in a loss on the disposal of between £200 million to £230 million and forcing it to jump ship and sell the UK arm of company to Hilco for £1.
Since its takeover, Hilco has been closing stores and streamlining its operations, resulting in 303 jobs being cut at its head office in June.
Its new turnaround will see popular products and brands return to its shelves which were dropped by Wesfarmers, alongside the return of concessions from the likes of Laura Ashley and Habitat.