Since the disastrous takeover of Homebase by the Australian firm Westfarmers the new owners, Hilco who bought the business for £1, have announced hundreds of job losses in the head office. The chain has already closed a number of its stores but there are rumours that the business may try and close more via a company voluntary arrangement (CVA). Hilco are a specialist restructuring firm that rescued HMV in 2013 but not without a downsizing of the estate.
Damian McGloughlin, Homebase CEO, said: “We have not taken this decision lightly, but decisive action is required to start rebuilding Homebase’s position in the UK market. “We will be providing as much support as we can to help those affected through this difficult time.”
This is a worrying time for employees as Homebase has 250 UK stores and employs around 12,000 people. It has been suggested that the firm may be able to close 80 stores via company voluntary arrangement. It is not clear how this figure being bandied about has been arrived at as CVA can take many forms. They will also certainly seek rent reductions on a number for stores.
What is the future for Homebase?
Homebase now occupies an odd position in the DIY and Home furnishings market. B&Q, Wickes and Screwfix provide strong competition in the commercial and discount market and online is also strong for smaller items. Homebase moved away from home furnishings such as sofa's/kitchens which is a legacy of the short ownership of Westfarmers. Hilco cleverly changed HMV's focus to more merchandise and "events" and they will be looking to change the offering probably at Homebase as well.
Categories: What is a CVA or Company voluntary arrangement?