Homebase collapses with 2,000 jobs at risk

Homebase has collapsed into administration, putting 2,000 jobs at risk.

Its owner Hilco had been looking to sell the struggling retailer, but has not managed to find an outright buyer.

The owner of homeware chain The Range is buying up to 70 stores and the brand, safeguarding about 1,600 jobs.

This leaves 49 stores without a buyer, and thousands of jobs at risk in the stores and head office. Administrators Teneo declined to say which stores were at risk of closing at this stage.

The 49 stores at risk will continue to trade while Teneo looks for a buyer, and there will be no immediate redundancies.

Along with up to 70 stores, Range owner CDS Superstores has also bought the brand name and intellectual property.

It is unclear whether the remaining stores will stay branded as Homebase.

Homebase chief executive Damian McGloughlin said the past three years had been "incredibly challenging" for DIY stores.

He said a "decline in consumer confidence and spending following the pandemic" and "persistent high inflation, global supply chain issues and unseasonable weather" had all had an impact.

McGloughlin said the business had restructured and sought investment, but "these efforts have not been successful".

He added that staff would find the news of the collapse "unsettling".

Teneo joint administrator Gavin Maher said "this is a very difficult and uncertain time for all involved".

He said any party with an interest in buying the remaining stores should "get in touch".

Homebase recently completed the sale of 11 of its UK stores to Sainsbury’s, and the supermarket is in the process of buying another three.

Hilco bought Homebase in 2018 for £1 from Wesfarmers after a disastrous foray into the UK market for the Australian firm.

Wesfarmers had bought Homebase in 2016 and immediately sacked Homebase's senior management team.

It admitted making a number of "self-induced" blunders, such as underestimating winter demand for a range of items from heaters to cleaning and storage, and dropping popular kitchen and bathroom ranges.

After Hilco bought Homebase it brought in a swathe of cost-cutting measures.

But Homebase struggled as consumers cut back on spending in the cost-of-living crisis, and reported an £84.2m loss last year.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said it had been "tough going in the home renovation market as consumers have tightened their belts amid high borrowing costs".

Although interest rates have started to come down, homeowners have been "ultra-cautious", with some saving for holidays rather than DIY, she said.

However, if the price has been right, consumers have been willing to "splash the cash", with B&M and Home Bargains doing better at the "value" end of the market, she added.