Homebase to close 42 stores as high street misery continues

Homebase is pressing ahead with a wave of store closures that will see 42 DIY outlets shut, putting around 1,500 jobs at risk.

The retailer is closing the stores via a Company Voluntary Agreement (CVA), a controversial insolvency procedure used by struggling firms to shut under-performing shops.

Restructuring experts at Alvarez & Marsal will carry out the CVA, which will require the support of landlords.

An official announcement from the company is due later on Tuesday.

The Press Association first reported in June that Homebase was exploring further store closures through the procedure.

The latest restructuring would come on top of a store closure programme the retailer has been carrying out since February.

A total of 16 Homebase stores have been shut this year and the business has also axed 303 jobs at its head office in Milton Keynes.

Homebase could see some resistance from landlords to the CVA, with the property industry expressing disdain for the procedure, saying it leaves them out-of-pocket.

CVAs have been adopted by a host of retailers including New Look, Carpetright and Mothercare.

The Homebase store closures follow the sale of the business earlier this year by its former Australian owner Wesfarmers to Hilco, a retail turnaround specialist, for £1.

Homebase was bought by Wesfarmers for £340 million in 2016.

Wesfarmers is known for its Bunnings chain in Australia, and attempted to import the home improvement brand to the UK by converting a host of Homebase stores into the Bunnings format.

However, the strategy ended in disaster.

Prior to the Hilco takeover, Homebase had 250 stores at its peak and 12,000 staff.