1,500 jobs at risk as Homebase reveals the 42 stores it wants to close - including Ipswich
Homebase has confirmed the 42 stores it wants to close as part of a restructure that puts 1,500 jobs at risk - and it includes the Ipswich branch.
The retailer is closing the stores via a company voluntary arrangement (CVA), a controversial insolvency procedure used by struggling firms to shut under-performing shops.
Restructuring experts at Alvarez & Marsal will carry out the CVA, which will require the support of landlords.
In the East of England it has outlets in Bury St Edmunds, Cambridge, Cromer, Dereham, Felixstowe, Ipswich, Lowestoft, Newmarket, and two in Norwich, on Hall Road and in Sprowston.
Of those, Ipswich is the only store to have been identified as being at risk. The full list of affected stores is below.
Damian McGloughlin, chief executive 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.”
Stephanie Pollitt, Assistant Director of Real Estate Policy, British Property Federation (BPF), said: “These situations are never easy as property owners need to take into consideration the impact on their investors, including those protecting their investors’ pensioners’ savings, as they vote on the CVA proposal.
“Homebase and Alvarez & Marsal have, however, demonstrated best practice, engaging with the BPF in the process and therefore ensuring property owners’ interests have been properly taken into account. Ultimately, it will be for individual property owners to decide how they will vote on the CVA, but the proposal has sought to find a solution that provides a sustainable future for Homebase.”
The Press Association first reported in June that Homebase was exploring further store closures through the procedure.
The latest restructuring would come on top of a store closure programme the retailer has been carrying out since February.
A total of 16 Homebase stores have been shut this year and the business has also axed 303 jobs at its head office in Milton Keynes.
Homebase could see some resistance from landlords to the CVA, with the property industry expressing disdain for the procedure, saying it leaves them out of pocket.
CVAs have been adopted by a host of retailers including New Look, Carpetright and Mothercare.
The Homebase store closures follow the sale of the business earlier this year by its former Australian owner Wesfarmers to Hilco, a retail turnaround specialist, for £1. Homebase was bought by Wesfarmers for £340 million in 2016.
Wesfarmers is known for its Bunnings chain in Australia, and attempted to import the home improvement brand to the UK by converting a host of Homebase stores into the Bunnings format.
However, the strategy ended in disaster. Prior to the Hilco takeover, Homebase had 250 stores at its peak and 12,000 staff.
The stores identified for potential closure by Homebase are:
1. Aberdeen Bridge of Don
2. Aberdeen Portlethen
4. Bedford St Johns
9. Cardiff Newport Road
10. Croydon Purley Way
12. Dublin Fonthill
13. Dublin Naas Road
15. East Kilbride
24. London Merton
25. London New Southgate
26. London Wimbledon
28. Oxford Botley Road
31. Poole Tower Park
34. Seven Kings
36. Southampton Hedge End
39. Swindon Drakes Way
40. Swindon Orbital