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- Sky also said Teneo was looking for buyers for another 50 stores.
- A sale would end restructuring specialist Hilco Capital’s ownership of Homebase
Gardening and leisure retailer The Range is reportedly close to a deal to buy dozens of Homebase stores as part of a rescue deal.
News from heaven said on Wednesday that the Plymouth-based company, whose parent company Norton Group owns Wilko, was looking to buy up to 75 outlets as well as Homebase’s branding and e-commerce division.
The deal would save a potential 1,500 jobs at Homebase, but another 1,700 workers would still face uncertainty.
Possible deal: The Range, whose parent company Norton Group owns Wilko, was looking to buy up to 75 outlets as well as the Homebase brand and e-commerce division.
Sky reports that corporate advisory firm Teneo was looking for buyers for a further 50 stores if it is appointed administrator.
It claimed that “discount food retailers, DIY rivals and other major brands” had shown interest in acquiring such sites.
A sale would end six years of ownership of Homebase by turnaround specialist Hilco Capital, which bought the business six years ago for just £1 from Australian retailer Wesfarmers.
One analyst described Wesfarmers’ ownership of Homebase after acquiring it for £340m in 2018 as an “incredible disaster”, beset by “woeful management decisions, clumsy execution and a misperception of the UK market”.
Homebase enjoyed some growth during the early part of the Covid-19 pandemic as Brits with extra cash sought to renovate their properties.
However, it has struggled in recent years as higher interest rates and cost-of-living pressures have slowed spending on home improvements.
In the 12 months to January 2023, the company suffered a loss of £84.2m, after making a profit of £30m the previous year. Its sales also fell from £788m to £701m.
While inflation has fallen significantly, Homebase has faced stiff competition from rivals such as Wickes and B&Q owner Kingfisher, says Susannah Streeter, head of money and markets at Hargreaves Lansdown.
He added: ‘Although interest rates have started to fall, landlords have been extremely cautious and major items are difficult to shift.
“Some consumers appear to have reserved their spending for vacations and experiences rather than big makeovers.”
In August, Sainsbury’s bought ten Homebase stores across the UK with the aim of converting them into supermarkets between 15,000 and 40,000 square feet in size.
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