THE RETAIL BULLETIN - The home of retail news
HOME
RETAIL NEWS
RETAIL EVENTS
Fashion
Department Stores
Shopping Centres & Retail Parks
Home & DIY
Electricals
Health & Beauty
General Merchandise
Entertainment
Sports & Leisure
Retail Solutions
Food & Drink
RETAIL INSIGHTS
RETAIL SOLUTIONS
ABOUT US
CONTACT US
SUBSCRIBE FOR FREE
Wesfarmers sells Homebase for nominal sum

The Australian Wesfarmers group has sold its Homebase DIY business to Hilco Capital for a nominal sum.

HOME & DIY

Wesfarmers sells Homebase for nominal sum

Under the terms of the agreement, Hilco will acquire all Homebase assets, including the brand, its store network, freehold property, property leases and inventory. In addition, the 24 stores that converted to Bunnings pilot stores will revert to the Homebase brand.

Following the sale, Wesfarmers will participate in a value share mechanism whereby it will be entitled to 20% of any equity distributions from the business. 

The sale follows a review of the Bunnings UK and Ireland business which considered a range of options to improve shareholder returns.

Operating around 250 stores across the UK, Homebase was acquired by Wesfarmers in 2016 for £340 million. However, today Wesfarmers said the investment had been disappointing, with problems arising from poor execution post-acquisition being compounded by a deterioration in the UK retail sector.

Commenting on the sale, Wesfarmers managing director Rob Scott said: “A divestment under the agreed terms is in the best interests of Wesfarmers’ shareholders and will support the ongoing reset and repositioning of the Homebase business.

“While the review confirmed the business is capable of returning to profitability over time, further capital investment is necessary to support the turnaround. The materiality of the opportunity and risks associated with turnaround are not considered to justify the additional capital and management attention required from Bunnings and Wesfarmers.”

Wesfarmers said Homebase‘s operating performance had improved in recent months under the new management team headed up by Damian McGloughlin, who will continue to lead the company in delivering the new management’s turnaround plan.

Scott added: “We wish Damian and the team well during the transition and as they take the business into its next chapter under a new owner with a track record of retail turnaround in the UK.”

Email this article to a friend

You need to be logged in to use this feature.

Please log in here

Subscribe For Retail News

RETAIL EVENTS

Retail Human Resources Summit
Retail Human Resources Summit
Wednesday 3 October 2018
The Cavendish Conference Centre, London W1
The 10th HR Summit 2018, The Cavendish Conference Centre, London W1, 3rd October 2018
The Retail Design Summit 2018
The Retail Design Summit 2018
14 November 2018
The Cavendish Conference Centre
The Retail Design Summit 2018
Omnichannel Futures Conference 2019
Omnichannel Futures Conference 2019
6 February 2019
Cavendish Conference Centre, London WG1 9DT
A truly omnichannel offering requires an understanding of customer behaviour across all shopping channels and how this should impact your overall business strategy