Homebase is the UK's #2 home and garden retailer, sitting behind B&Q but ahead of Wickes. It is traditionally stronger than its rival in the housewares and garden ornaments segment. It passed through the hands of several owners before being acquired in 2016 by Australian group Wesfarmers for £340m. That deal proved disastrous as a result of an ill-conceived plan by Wesfarmers to rebrand larger stores as Bunnings, after their successful Australian chain, and drop many of the product lines for which Homebase had become best-known. Performance of the UK business went into a nose-dive. After two years and accumulated losses of A$1.4bn, Wesfarmers finally admitted defeat in 2018, selling the business to turnaround specialist Hilco Capital for just £1. The Homebase brand is being restored in those stores where it had been dropped, but as many as 100 of the chain's 249 outlets are likely to be closed. Damian McGloughlin is managing director. For the year to Feb 2017, Homebase reported sales of £1.2bn, down almost 14% on the year before, and losses of £140m. Homebase was originally launched in 1981 by British supermarket group Sainsbury's as a home and garden sideline to its main grocery business. It was sold to its management team in 2001, before being acquired by GUS a year later, and subsequently spun out as part of Home Retail Group. Adbrands does not currently offer a business profile for this company but subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to Adbrands.net premium services. Click here to access Adbrands account assignments (subscribers only); or see here for information on how to subscribe.
Capsule checked 12th June 2018
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Adbrands Weekly Update 31st May 2018: A disastrous foray into the UK by Australian retail giant Wesfarmers was brought to an ignominious end by the sale of home improvement chain Homebase for just £1 to turnaround specialist Hilco. Wesfarmers' total losses on the whole sorry saga are expected to reach A$1.4bn - around US$1bn. It was an unanticipated disaster for the group, which owns leading Australian supermarket group Coles as well as a collection of other local retail chains, including Australia's homegrown DIY champion Bunnings. Homebase is the UK's second largest home & garden store after B&Q, but performance has been weak for several years. Wesfarmers attempted to restore its fortunes by implanting the Bunnings model and branding; however it failed to heed the critical differences between Australian and British DIY customers, dropping Homebase's popular offering of soft furnishings and garden ornaments in favour of power tools and barbecues. That, combined with poor weather, the fallout from Brexit, and the removal of virtually the whole existing Homebase management team in favour of newcomers to the business conspired to deliver an even more dramatic slump in performance. Hilco is expected to restore the Homebase branding, but it will also close the worst performing stores.
Adbrands Weekly Update 21st Jan 2016: Australian conglomerate Wesfarmers confirmed the acquisition of UK-based DIY and gardening chain Homebase for £340m. It will become a local partner to the group's Australian business Bunnings, the leading Ozzie home improvement chain. Wesfarmers is expected to phase out the Homebase name in favour of the Bunnings brand. The announcement coincided with related news from Wesfarmers' domestic rival Woolworths, which said it is pulling the plug on its own struggling DIY chain Masters, a joint venture with America's Lowe's. The sale of Homebase also significantly boosts Sainsbury's chances in its pursuit of Homebase's sister chain within Home Retail Group, Argos.
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