Major DIY retailer with 144 stores ‘could be sold’ as well-known high street name considers bid
A MAJOR DIY retailer with 144 stores “could be sold” as a well-known high street name considers placing a bid for the business.
Homebase‘s owner is understood to be gearing up to launch a sale of the company after being approached by The Range.
Hilco Capital, which purchased Homebase from Wesfarmers in 2018 for £1, is set to start a formal process as talks continue with other potential bidders, Sky News reports.
Other retailers that have previously shown an interest in Homebase include B&M, the London-listed discount retailer.
Owned and run by entrepreneur and self-made billionaire Chris Dawson, The Range started life as a market stall trading across the South West of England.
The first store, CDS, opened in 1989, and there are now over 210 stores across the UK and Ireland.
Wilko’s name and intellectual property were bought by The Range after the chain collapsed into administration last year.
Homebase currently operates around 144 locations across the UK.
Homebase was founded by the supermarket chain Sainsbury’s and Belgian retailer GB-Inno-BM in 1979.
The first store opened in Croydon in April 1981 and was located on the Purley Way.
The company steadily grew and, in 1989, opened its 50th store in Norwich.
By 1995, Homebase had 82 stores, and Sainsbury’s acquired 241 Texas Homecare stores, which were soon converted into the Homebase format.
Homebase then operated as a subsidiary under the Home Retail Group from October 2006 until 2016.
Australian retailer Wesfarmers and owner of the Bunnings brand purchased Homebase for £340million in February 2016.
However, by February 2018, Wesfarmers reported losses relating to the takeover of £57million in the year to June 2017, and soon decided to implement a review of the business.
In May 2018, Hilco bought the hardware store chain for just £1.
Prior to the Hilco takeover, Homebase had 250 stores at its peak and 11,500 staff.
However, the brand soon returned to profit after it entered a CVA agreement and restructured its business.
Homebase has closed 106 stores since it was taken over by Hilco Capital in 2018.
HISTORY OF HOMEBASE
- 1979: Homebase was founded by the supermarket chain Sainsbury’s and Belgian retailer GB-Inno-BM
- April 1981: The first store opened in Croydon
- October 1981: The second store opened in Leeds
- 1989: Homebase opened its 50th store in Norwich
- 1995: The chain boasted 82 stores and Sainsbury’s acquired all 241 Texas Homecare stores
- 1996-1999: All Texas Homecare stores were converted into the Homebase format
- 2001: Sainsbury’s sells Homebase but retains a 17.3% minority stake until 2002
- 2006: Homebase operated as a subsidiary under the Home Retail Group from October 2006 until 2016
- February 2016: Australian retailer Wesfarmers owner of the Bunnings brand, purchased Homebase for £340million
- February 2018: Wesfarmers reported losses relating to the takeover of £57million in the year to June 2017, and soon decided to implement a review of the business
- May 2018: Hilco bought the hardware store chain for just £1
- 2018-2024: Homebase has closed 106 stores since it was taken over by Hilco Capital
HOMEWARE CHAINS STRUGGLE
The news today follows a tricky time for home improvement chains, both large and small.
It comes as shoppers have been cutting back on spending following the pandemic.
Plus, the recent turmoil in the housing market has meant that homeowners aren’t as focused on DIY projects as they once were.
In the spring, Kingfisher, which owns B&Q and Screwfix, revealed that annual profits had slumped by more than a quarter.
The company reported a 25.1% drop in underlying pre-tax profits to £568million for the year to January 31, 2024.
Window and door specialist Everest called in administrators in April, leaving customers in the dark about their orders
Last year, the group had previously cautioned profits would slip after a 36% drop in pre-tax profits from £1billion to £611million in the 12 months to January 2023.
Rival Wickes also reported a 31% fall in profits to £52million on flat revenues of £1.55billion for 2023.
Windows and doors company Safestyle collapsed into administration in October last year.
The company has a manufacturing site in Wombwell, near Barnsley and 42 sales branches and depots across the country.
Flooring retailer Tapi has struck a multimillion-pound rescue deal to save the Carpetright brand and dozens of stores on Monday.
Tapi has agreed to purchase 54 of the ailing chain’s stores and two warehouses in a pre-pack administration deal that will save 300 jobs.
However, the deal does not include 200 other stores which face an uncertain future, and over 1,000 job losses are on the cards.
It’s understood that Tapi is the only competitor to have offered a deal that involves rescuing both jobs and stores.
Why are retailers closing shops?
EMPTY shops have become an eyesore on many British high streets and are often symbolic of a town centre’s decline.
The Sun’s business editor Ashley Armstrong explains why so many retailers are shutting their doors.
In many cases, retailers are shutting stores because they are no longer the money-makers they once were because of the rise of online shopping.
Falling store sales and rising staff costs have made it even more expensive for shops to stay open. In some cases, retailers are shutting a store and reopening a new shop at the other end of a high street to reflect how a town has changed.
The problem is that when a big shop closes, footfall falls across the local high street, which puts more shops at risk of closing.
Retail parks are increasingly popular with shoppers, who want to be able to get easy, free parking at a time when local councils have hiked parking charges in towns.
Many retailers including Next and Marks & Spencer have been shutting stores on the high street and taking bigger stores in better-performing retail parks instead.
Boss Stuart Machin recently said that when it relocated a tired store in Chesterfield to a new big store in a retail park half a mile away, its sales in the area rose by 103 per cent.
In some cases, stores have been shut when a retailer goes bust, as in the case of Wilko, Debenhams Topshop, Dorothy Perkins and Paperchase to name a few.
What’s increasingly common is when a chain goes bust a rival retailer or private equity firm snaps up the intellectual property rights so they can own the brand and sell it online.
They may go on to open a handful of stores if there is customer demand, but there are rarely ever as many stores or in the same places.