Homebase names Irish stores in closure plan
British DIY retailer Homebase has identified three Irish stores for potential closure as part of its cost- cutting plans.
Two stores in Dublin, at Fonthill and the Naas Road, and one in Limerick have been identified out of Homebase’s existing 11 Irish outlets.
The troubled retailer’s creditors are due to vote on August 31 on the cost- reduction plan, which is proposing 42 store closures in the UK and Ireland and up to 1,500 job cuts.
Homebase operates 241 stores in the two countries and employs 11,000 people in shops, support offices and distribution facilities.
It has already cut more than 300 jobs at its Milton Keynes headquarters this year and closed 17 stores.
A company spokesperson declined to say how many people it employs in Ireland and how many jobs could be lost here. The Mandate trade union said it had members in most of the stores in Ireland. Homebase said that the proposed closures will result in redundancies but “every effort” would be made to redeploy staff within the remaining business “where possible”.
It said that all UK and Irish stores will remain open for business as usual for the foreseeable future and that the process will not impact on customer purchases, outstanding orders or product/service guarantees.
The newly proposed shop closures form part of a so-called company voluntary arrangement restructuring, allowing the business to avoid insolvency or administration. Homebase was acquired for just £1, earlier this year, by restructuring firm Hilco from Australian group Wesfarmers.
The retailer said its sales performance and profitability had declined significantly under its previous owner over the past two years.
It also said that it has faced “an extremely challenging retail trading environment” of late; reflective of weak consumer confidence and reduced consumer spending.
“These factors have had a significant adverse impact on Homebase’s trading position,” it said.
Homebase said its store portfolio mix is “no longer viable”, with many stores lossmaking and rental costs associated with others “unsustainable”.
Homebase chief executive Damian McGloughlin said launching the company voluntary arrangement had been a difficult decision.
“We need to continue to take decisive action to address the underperformance of the business and deal with the burden of our cost base, as well as to protect thousands of jobs.
“The company voluntary arrangement 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,” he said.
A string of UK store groups have gone out of business or announced shop closures this year as rising labour costs, higher business property taxes and growing online competition coincide with subdued customer spending, with department stores particularly hard hit.
Debenhams has cut profit forecasts three times this year; Marks and Spencer plans to close 100 UK shops by 2022; John Lewis has issued a profit warning and Mike Ashley’s Sports Direct has snapped up House of Fraser out of administration.
Company voluntary arrangements have also been adopted by a number of British retailers including New Look, Carpetright and Mothercare.
