Homebase has been sold to retail group CDS in a rescue deal securing up to 1,600 jobs and 70 stores but leaving the future of its remaining 2,000 workers and 49 shops unclear.
The DIY retailer appointed administrators at consultancy Teneo on Wednesday before CDS, which owns The Range homeware outlets, bought the majority of its stores out of administration.
Teneo said the remaining 49 UK stores will continue to trade as normal while administrators try to find a buyer.
CDS, which is owned by retail magnate Chris Dawson, bought the 40-year-old Homebase brand.
Damian McGloughlin, chief executive of Homebase, said the last three years had been “incredibly challenging” for DIY stores, blaming “a decline in consumer confidence and spending” after the pandemic.
READ MORE:
Aldi set to open brand-new store on outskirts of Scottish city
Glasgow Airport sold to Canadian buyers in £1bn-plus deal
“Against this backdrop, we have taken many and wide-ranging actions to improve trading performance including restructuring the business and seeking fresh investment.
“These efforts have not been successful and today we have made the difficult decision to appoint administrators.”
Homebase was bought for £1 by investment firm Hilco Capital in 2018, which introduced a swathe of cost-cutting measures in the subsequent years.
But the retail chain struggled as customers cut back on spending amid the cost-of-living crisis, and reported an £84.2 million loss last year.
In August, Sainsbury’s struck a deal to buy 10 Homebase stores and convert them into supermarkets.
The jobs still at risk include workers at Homebase’s head office in Milton Keynes, as well as the remaining stores.
The rescue deal comes after a hunt for a buyer from Homebase’s previous owners Hilco, which is thought to have lasted for the last two months.
Mr Dawson, whose CDS acts as parent company to The Range, also bought parts of high street retailer Wilko after it collapsed last year.
It is unclear which stores will remain branded as Homebase after the deal, while administrators did not immediately disclose the locations of the 49 outlets which were not included in the deal.
The administrators said all employee wages and benefits will be paid for their period of employment, while customer orders will still be fulfilled as far as possible.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here