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Struggling DIY chain Homebase is poised to appoint administrators for its UK operations, putting dozens of stores and hundreds of jobs at risk.
The retailer, which operates about 130 home improvement and garden centre shops, has lined up insolvency practitioners at Teneo to help it sell a large chunk of its estate to a rival in a so-called prepack administration, according to two people close to the process.
CDS Superstores, which owns and runs The Range homeware chain, is to buy about 70 Homebase outlets, the people added, as well as the brand and its website. The Range bought the Wilko brand this year after the value chain collapsed amid a cash crunch.
Although the prepack deal is expected to save about 1,600 jobs, the fate of hundreds more remains uncertain.
HHGL Limited, trading as Homebase, filed a notice of intention to appoint administrators at the High Court in London on Wednesday.
Teneo is in talks with other interested parties about selling the remainder of the shops, which will continue trading for now, after an outright sale of the business did not materialise.
Homebase, which was bought by restructuring specialist Hilco for £1 in 2018 after a disastrous period under the ownership of Wesfarmers, brought in consultants at Teneo this year to identify cost-saving measures.
It recorded a pre-tax loss of £85mn in the year to January 1 2023, while turnover fell to £701mn from £788mn during the period, with the company blaming “a rapid decline in consumer confidence and the cost of living crisis” for its performance.
Homebase in 2018 temporarily entered into a company voluntary arrangement to enable it to cut rents and close stores.
“From being the second-largest DIY and gardening retailer in 2015, Homebase’s market share had more than halved by 2021 as Hilco struggled to recover from Wesfarmers’ complete overhaul of its offer,” said Matt Walton, a senior data analyst at research firm at GlobalData.
Supermarket chain J Sainsbury acquired 10 stores from Homebase in August and said it planned to convert them to large supermarkets.
