North spared in latest round of Homebase store closures
IN a boost to the local retail sector, Northern Ireland was not included as part of a wave of store closures announced by DIY giant Homebase yesterday.
None of the north's nine outlets have been named as part of the 42 due to shut their doors via a Company Voluntary Arrangement (CVA) - a controversial insolvency procedure used by struggling firms to shut under-performing shops.
It is welcome news, given the loss already this year of Toys R Us and Maplin from the high street.
The 42 Homebase stores due to close include three in the Republic of Ireland, of which two are located in Dublin and the other in Limerick. In all 1,500 jobs are at risk. The nine Homebase stores in the north are located in Derry, Antrim, Bangor, Cookstown, Omagh, Craigavon, Newtownabbey and Belfast (two).
Homebase boss Damian McGloughlin said the decision to move forward with the CVA had not been taken lightly.
"Homebase has been one of the most recognisable retail brands for almost 40 years, but the reality is we need to continue to take decisive action to address the under-performance of the business and deal with the burden of our cost base, as well as to protect thousands of jobs.
"The CVA is therefore an essential measure for the business to take and will enable us to refocus our operations and rebuild our offer for the years ahead."
Mr McGloughlin cited declining sales and rental costs as two key factors in the move.
"Rental costs associated with stores are unsustainable and many stores are loss-making.
"Homebase's sales performance and profitability declined significantly under the previous ownership over the last two years.
"In addition, the company has faced an extremely challenging retail trading environment, reflecting weak consumer confidence and reduced consumer spending.
"These factors have had a significant adverse impact on Homebase's trading position."
Restructuring experts at Alvarez & Marsal will carry out the CVA, which will require the support of landlords. 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.