Local branches are two of 42 stores the owners say are no longer viable
The Homebase stores in Weir Road, Wimbledon and Jubilee Way, South Wimbledon, are among 42 outlets to be closed by owners Hilco Capital.
The closure is part of a proposed Company Voluntary Arrangement (CVA) which is designed to save the group from administration.
The restructuring specialist bought Homebase earlier this year and had already shut 18 branches as part of their attempt to return the group to profitability. The group was reported to be losing £15-20million a month back in May when the purchase was made.
Alvarez & Marsal are advising them and 1,500 jobs could be lost as a result of the closures along with over 300 already cut from its headquarters in Milton Keynes.
Homebase in a statement, “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.
“After a comprehensive review, Homebase has concluded that its current store portfolio mix is no longer viable. Rental costs associated with stores are unsustainable and many stores are loss making.
“The CVA enables Homebase to make essential changes to its store portfolio, reducing its cost base and providing a stable platform on which to continue its turnaround.
“Under the terms of the CVA proposal, all creditors receive a better outcome than any other likely alternative.”
The closures are to take place in the second half of this year and continue into 2019. No date has yet been given for the closure of the Wimbledon stores. The creditors will vote on the CVA on 31 August 2018.
August 16, 2018