Honiton's Homebase store avoids the chop as potential closure looms for 42 outlets nationwide
PUBLISHED: 12:55 14 August 2018 | UPDATED: 09:24 16 August 2018
More than 40 Homebase stores across the UK have been earmarked for potential closure - but Honiton's is not one of them.
The struggling firm announced today (Tuesday) that it is set to launch a Company Voluntary Arrangement (CVA).
It is now seeking approval from creditors on a proposed plan to reduce its cost base in the UK and the Republic of Ireland.
Homebase’s sales performance and profitability declined significantly under the previous ownership over the last two years.
In addition, the company says it has faced an challenging retail trading environment reflecting ‘weak consumer confidence’ and ‘reduced consumer spending’.
These factors, the firm adds, have had a significant adverse impact on its trading position.
The closest Homebase store to Honiton, in Exeter, is included on the list of 42 outlets nationwide which have been identified for potential closure between late 2018 and early 2019.
After a comprehensive review, Homebase has concluded that its current store portfolio mix is no longer viable.
Rental costs associated with stores are unsustainable and many stores are loss-making.
The CVA enables Homebase to make essential changes to its store portfolio, reducing its cost base and providing a stable platform on which to continue its turnaround. Under the terms of the CVA proposal, all creditors receive a better outcome than any other likely alternative.
The proposed changes to the store portfolio will also spell the loss of 1,500 jobs.
Damian McGloughlin, CEO of Homebase, said: “Launching a CVA has been a difficult decision and one that we have not taken lightly. Homebase has been one of the most recognisable retail brands for almost 40 years, but the reality is we need to continue to take decisive action to address the underperformance of the business and deal with the burden of our cost base, as well as to protect thousands of jobs.
“The CVA is therefore an essential measure for the business to take and will enable us to refocus our operations and rebuild our offer for the years ahead.”
Founded in 1979, Homebase is one of the UK’s leading home improvement and garden retailers, operating 241 stores across the UK and the Republic of Ireland and employing 11,000 people throughout its store estate.
The 42 Homebase stores identified for potential closure
• Aberdeen Bridge of Don
• Aberdeen Portlethen
• Bedford St Johns
• Cardiff Newport Road
• Croydon Purley Way
• Dublin Fonthill
• Dublin Naas Road
• East Kilbride
• London Merton
• London New Southgate
• London Wimbledon
• Oxford Botley Road
• Poole Tower Park
• Seven Kings
• Southampton Hedge End
• Swindon Drakes Way
• Swindon Orbital