|Industry||Retail / home improvement|
|Fate||Voluntary agreement as of 31 August 2018|
|Founded||1979 (as Sainsbury's Homebase)|
Number of locations
|United Kingdom: 153 Stores (Oct 2019) |
Republic of Ireland 11 Stores
|Revenue||£127,914 LOSS (2017)|
Number of employees
Homebase (HHGL) is a British home improvement retailer and garden centre with stores across the United Kingdom and Republic of Ireland. Founded by Sainsbury's and GB-Inno-BM in 1979, the company was owned by Home Retail Group from October 2006, until it was sold to the Australian conglomerate Wesfarmers in February 2016. Wesfarmers' management ended in financial disaster, and in 2018, the company was sold to Hilco Capital for £1.
Wesfarmers launched a programme to rebrand the business under its existing Australian Bunnings Warehouse operation, opening the first pilot store in February 2017. This conversion process was intended to be completed within five years of the acquisition, however, with only 24 stores converted and mounting losses, Wesfarmers agreed to sell the business to restructuring firm Hilco for a nominal £1.
This sale was completed on 11 June 2018, rebranded stores reverted to the Homebase brand soon after.
The company recorded sales figures of £1.49 billion for the financial year of 2013 to 2014, with an operating profit of £18.9 million for the year 2013 to 2014. On 14 August 2018, Hilco announced that it would close 42 stores and cut 1,500 jobs through a company voluntary arrangement, which was passed following a vote on 31 August 2018.
Homebase was founded by the supermarket chain Sainsbury's and Belgian retailer GB-Inno-BM in 1979, as Sainsbury's Homebase. This was to bring a supermarket style layout to the British Do It Yourself (DIY) market. The first store was in Croydon, opening on 3 March 1981, located on the Purley Way.
Expansion and decline
In January 1995, Homebase tripled in size, when Sainsbury's bought rival store group Texas Homecare from Ladbrokes. These stores were rebranded, and converted to the Homebase format, beginning in February 1996, with the store in Longwell Green, Bristol (this being one of the first stores to be closed by Hilco in 2018), with the process being completed by 1999. By the time of the purchase, Texas had staff totalling 11,600, and Homebase had 4,500.
In October 1999, Sainsbury's bought Hampden Group the franchisee of ten stores of Homebase across Ireland. In August 2000, the former chief executive of Texas Homecare, Ron Trenter, made an unprecedented bid for Homebase. In September 2000, Focus Do It All considered acquiring Homebase, but decided to acquire Great Mills.
In October 2000, Home Depot joined the race to acquire Homebase, but to no success. Home Depot were long rumoured to acquire B&Q, though talks ending in May 2005 did not result in any takeover deal.
On 22 December 2000, Sainsbury's sold the Homebase chain, in a twofold deal worth £969 million. In March 2001, the sale of the chain of 283 stores to venture capitalist Schroder Ventures generated £750 million, and the sale of 28 development sites to rival B&Q's parent company, Kingfisher plc, generated £219 million. At the time, the chain had 13% of the United Kingdom market, with 283 stores and 17,000 employees, behind B&Q and Focus Do It All.
Home Retail Group ownership
In November 2002, Homebase was sold again, this time to GUS plc (formerly Great Universal Stores plc) for £900 million, where it became part of Argos Retail Group (ARG). On 10 October 2006, GUS completed a demerger of its remaining two businesses, Experian and ARG. ARG was renamed Home Retail Group, within which Homebase operated until 27 February 2016.
In October 2007, it was announced that Home Retail Group had signed a contract for the purchase of 27 leasehold properties from Focus DIY. The purchase price paid was £40 million in cash. The properties were transferred over the period up to 31 December 2007, and were then refitted to the Homebase fascia over the course of several months.
No other infrastructure, and no merchandise stock were acquired as part of the transaction, although staff in these Focus stores transferred across to Homebase. In May 2014, Homebase launched the Homebase Design Centres. The new look stores have a Decorating Ideas and Advice Centre, offering touch screen technology, to help customers transform the look of rooms in their homes.
Following a review of the business, Home Retail Group announced in October 2014 that it would close around one quarter of Homebase stores by 2019. It was also confirmed that it would increase the number of Argos and Habitat concessions within Homebase stores. In April 2015, former Tesco executive Echo Lu succeeded Paul Loft as Managing Director.
On 18 January 2016, it was announced that Australian retailer Wesfarmers would acquire Homebase for £340 million, subject to shareholder approval. The transfer of ownership to Wesfarmers took place on 27 February 2016. Following the transfer of sale, Peter Davis was appointed Managing Director, succeeding Echo Lu.
Wesfarmers announced in June 2016 that it had cancelled the plans by Home Retail Group to close seven stores, and would seek to prevent the closure of eleven others. It described the closure of five additional stores as "unavoidable". It was also announced that Archie Norman was to advise on the turnaround of Homebase under Wesfarmers.
Laura Ashley plc confirmed in October 2016 that it would remove its concessions trading in 22 stores of Homebase by the second quarter of 2017, as Wesfarmers sought to remove all concessions and adopt the same business model as its Australian and New Zealand business.
Bunnings confirmed in November 2016 that the Homebase store in St Albans would be the first to be rebranded as Bunnings Warehouse as part of a trial, and opened in February 2017. An additional three were planned to be opened by June 2017, with up to six more completed by the end of the year. The stores have adopted a low cost warehouse model.
In February 2018, Wesfarmers reported losses relating to the takeover of £57 million in the year to June 2017, and that it would begin a review of the business. Wesfarmers sought buyers for the business in March, and by May, it had received bids from restructuring firms Alteri Investors and Hilco.
On 25 May 2018, it was announced that Homebase had been sold by Wesfarmers to turnaround specialists Hilco, for a nominal one pound sterling. Hilco took ownership of the Homebase business on 12 June 2018. All 24 stores converted to the Bunnings format were rebranded to the Homebase name. At the end of August 2018, a company voluntary arrangement (CVA) proposed by Hilco to close 42 stores and reduce rent on others was approved by Homebase's creditors.
The stores identified for closure in the CVA are all planned to close by the beginning of 2019. Homebase secured a £95 million asset lending contract with Wells Fargo Capital Finance on 26 November 2018.
On 24 December 2018, Hilco opened its first redesigned store nicknamed BoB (Best of Both) in Orpington. The store featured traditional Homebase "gondola" shelving alongside the Bunnings red racking, with a heavy focus on decorating, moving away from Wesfarmers' primary focus on tools.
Homebase operates over 170 stores in the United Kingdom, as of December 2018. In Ireland, the company has a further 11. In July 2013, an interim examiner was appointed by the High Court. Homebase stated the purpose of the examinership was to place the company back on a "sustainable footing".
Early in its history, Homebase used its Sainsbury's experience to move into using central warehouses from which to deliver its stock. By the 1990s, it was receiving the vast majority of its stock into central warehouses, then delivering it to stores. Homebase still receives a few direct deliveries to its stores, from manufacturers and vendors.
In May 2009, Homebase discontinued its own loyalty programme, the Spend & Save Card and replaced it with the Nectar loyalty card scheme, the United Kingdom's largest retail loyalty card. The Spend & Save card had been used by Homebase since 1982, and was believed to be one of the first store loyalty cards in the world.
Homebase allowed customers to collect and redeem points within its stores, becoming the first national DIY retailer to participate in this way.
Following the sale to Wesfarmers, Homebase left the Nectar loyalty card scheme on 31 December 2016.
From 1999 to 2005, Homebase used former Men Behaving Badly couple Neil Morrissey and Leslie Ash as a couple. Morrissey and Ash were the face of the brand for six years, until March 2005, when Homebase launched a series of new advertisements created by Abbott Mead Vickers BBDO, featuring the new slogan "Make a house a home."
From 2006 to 2009, Homebase used the song "Love Machine" by Girls Aloud in their television adverts. From 2009 to 2013, "Young Folks" by Peter Bjorn and John featuring Victoria Bergsman was used. During 2009 to 2010, the transformation of Carlisle railway station was one of the most expensive adverts Homebase has produced to date.
In April 2013, Homebase faced criticism following outrage, after a poster from a store in London was released. The poster appeared to highlight the benefits of free labour through work experience, called Workfare. The offending poster depicts a number of volunteer staff at the Haringey branch and is captioned: “How the work experience programme can benefit your store. Would 750 hours with no payroll costs help YOUR store?”"
Homebase released contradictory statements, the first stating 'The company is not signed up to the Workfare Programme' and the second that 'we have decided to make no further commitment to the Job Centre work experience programme'.
Neither statement appears to have deterred groups organising protests, with organisers calling Homebase’s scheme a "profit driven attack" on workers and benefit claimants. Before adding "We hope Homebase will soon join, Wilko, Superdrug and more than twenty other companies who have ended their involvement with workfare. However we are prepared for further protests in the weeks and months ahead should they fail to do so."
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