Homebase is poised to announce plans for a CVA which could see up to 80 stores close and up to 2000 employees face redundancy.
According to Sky News and Press Association, Hilco Capital – which bought Homebase for just £1 in May following a disastrous £340 million acquisition by Wesfarmers in 2016 – is planning to announce the CVA next week.
It is understood that Alvarez & Marshal will handle the CVA, which is expected to see between 50 to 80 of Homebase’s 249 stores shut, including the 18 stores that have pulled their shutters since the start of the year.
Definite numbers of store closures and potential job cuts are reportedly still being finalised, but Press Association reports that between 1500 and 2000 employees are potentially under threat of redundancy.
Meanwhile, Sky News reports that only 10 per cent of the Homebase’s 11,000-strong staff members would face job losses.
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.
It is understood that Hilco to have been working on plans Homebase’s CVA since the acquisition.
Prior to the Hilco takeover, Homebase had 250 stores at its peak and 12,000 staff.
Dave Gill of shopworkers’ trade union Usdaw said: “Staff in Homebase stores were extremely worried for the future after the announcement of head office job losses; and mounting speculation about store closures is clearly very concerning.
“I am in touch with the company and providing our members with the representation, support and advice they require at this difficult time.
“Clearly there is a huge task ahead to turn the company around, after it was sold for just one pound following the disastrous ownership by Wesfarmers.
“It is crucial that the company listens to the staff and invests in their experience and expertise to make a success of the business.
“That is best achieved through their trade union Usdaw.”