Home base gets its house back in order and comes with loss with new owners, after the devastating takeover by Bunnings threatened the future of the do-it-yourself chain
- The home base has reduced its losses by £ 140 million under new ownership
- The chain closed branches and cut jobs at headquarters to reduce costs by £ 100 million
- New management is trying to make the DIY chain healthy again
- A disastrous takeover by Bunnings in 2016 left the chain in deep water
What a difference ten months makes. The home base, which had destroyed money a year ago, looks like it is on its way to recovery under new ownership.
Private equity firm Hilco cracked the troubled do-it-yourself store for 1 pound last year, following a misguided and short-lived takeover by Australian do-it-yourself giant Bunnings, with bruises and collapse.
Since then, new management has overseen an urgent restructuring aimed at restoring the once beloved chain to profitability.
Fresh start: under new ownership, Homebase has stopped its losses and drastically reduced its cost base
Today, in the first formal update, Homebase said it was a & # 39; much stronger performance & # 39; has delivered, with the losses becoming smaller £ 172 million to £ 33 million in the second half of 2018.
It was partly due to the implementation of & # 39; difficult but necessary & # 39; cost saving measures.
Due to job losses at headquarters, 47 store closures and cuts at 70 other stores, £ 100 million in costs has been withdrawn from the company.
The retailer has also received a £ 95 million loan to improve the company's financial position and get it back on track.
Homebase boss Damian McGloughlin wants to restore the do-it-yourself chain to health
As part of an ongoing recovery plan, CEO Damian McGloughlin is trying the range Homebase was famous for & # 39; such as upholstery and more decorative items that were cleared during the Bunnings custody work.
Homebase has also re-introduced concessions in the store, creating new partnerships with Tapi, Silentnight and Ponden Home.
McGloughlin said: & # 39; After the change of ownership last year, we have drawn up a clear plan to restructure the company, with a focus on cost control, a better store environment and reducing the things that our team and customers appreciate most about Homebase.
& # 39; The benefits of the changes we've made are now coming. & # 39;
He added that while the company has only been in a three-year turn for 10 months, he & # 39; is very optimistic about the future & # 39 ;.
The home base generated sales of £ 498 million during the half year, a decrease of 3.5 percent when it closed about a quarter of stores.
& # 39; The home base has shown a glimmer of hope that it could actually recover from the disaster with the acquisition by Wesfarmers, & # 39; said GlobalData analyst Amy Higginbotham.
& # 39; But the road to recovery is long, & # 39; she added.
& # 39; Homebase will have to work hard to rebuild its loyal customer base and restore its reputation as a home improvement specialist, targeting both female and male demographers, after Wesfarmers changed stores into hard DIY large boxes. & # 39;