British home improvement retailer Homebase has unveiled plans to close 42 stores in the UK, potentially putting 1,500 jobs at risk.
Along with the closures of the stores, Homebase has sought for rent cuts of around 90% on 18 additional stores, reported the Guardian, which may lead to hundreds of additional job cuts.
Homebase wants to cut rents on around a fifth of its 241-store chain through a company voluntary agreement (CVA), an insolvency process to close stores that are not performing well.
As a part of the CVA, 39 stores in the UK and three in the Republic of Ireland will be closed by the end of this year and early 2019.
Homebase’s CVA plan was confirmed by Hilco, a restructuring specialist company.
Hilco bought the retailer chain for £1 this May from Australia’s Wesfarmers, which acquired Homebase for £340m in 2016.
Homebase chief executive Damian McGloughlin was quoted by The Guardian as saying: “Launching a CVA has been a difficult decision and one that we have not 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 underperformance 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.”
Alvarez & Marsal will conduct the CVA process.
Homebase was founded in 1979. The retailer was initially part of supermarket company J Sainsbury, and was owned by asset manager Schroders, the former Argos owner Home Retail Group, before it was acquired by Wesfarmers.