Homebase Lyme Green store closure confirmed

Homebase’s store at Lyme Green, Macclesfield has been confirmed as one of the Homebase stores set to close during 2018-2019.

The decision follows the agreement of 95.92% of its creditors to the plans as part of a Company Voluntary Arrangement (CVA) proposed by the struggling firm on August 14.

Damian McGloughlin, Homebase chief executive, said: “We are pleased that an overwhelming majority of our creditors, including such a proportion of landlords, have supported the plans laid out in the CVA.

“We now have the platform to turn the business around and return to profitability. This has been a difficult time for many of our team members and I am very grateful for their continued support and hard work.”

He added: “We can look to the future with great confidence, and we will be working closely with our suppliers to capitalise on the opportunities we see in the home improvement market in the UK and Ireland.”

Under the terms of the CVA proposal, 42 stores have been identified for closure during late 2018 and early 2019.

The move puts around 1,500 jobs at risk at the DIY chain which claimed earlier this month that its current store portfolio mix was no longer viable. Rental costs associated with stores are unsustainable and many stores are loss making. Its sales performance and profitability declined significantly under the previous ownership over the past 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.

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.

Homebase said under the terms of the CVA proposal, all creditors receive a better outcome than any other likely alternative. The company pledged that every effort will be made to redeploy team members within the business where possible.

Homebase had already closed 18 unprofitable stores as it struggled to stay afloat, including the axing of 303 head office jobs in Milton Keynes.

It was bought by restructuring experts Hilco in May for £1 after Australian owner Westfarmers walked away from the business following its acquisition – widely regarded as one of the most unsuccessful in UK retail history – having paid £340m two years ago when Homebase operated from more than 250 stores, with 11,000 staff.