TROUBLED home improvement retailer Homebase has launched an “administration sale” in some stores, as 49 remain at risk of closure.
Administration sales have been launched in Homebase branches in Loudwater in Buckinghamshire, and Blackpole retail park in Worcester.
Huge sales have been launched in Homebase stores after the brand fell into administration[/caption]
Signs posted in the two stores read ‘administration sale’ with discounts offered across thousands of products.
It’s not clear if the sales have been launched to simply clear stock or if the stores have been earmarked for closure.
The future of 49 stores remains uncertain after the home improvement store fell into administration earlier this month.
When Homebase fell into administration Chris Dawson, owner of The Range, rescued 70 stores in a pre-pack deal.
It is understood the stores to have launched sales were not included in the sale, but administrators Teneo told The Sun it would not comment on their future.
The deal with Mr Dawson also included the 40-year-old brand and its website.
It has since been revealed that the Homebase name will continue solely online, as all 70 stores sold are set to be rebranded as The Range superstores.
Administrators Teneo consultancy will now oversee the implementation of The Range’s rescue deal and the sale of all of Homebase’s remaining assets, including the remaining 49 stores.
Homebase operated 119 stores nationwide, including in major cities such as London, Birmingham, and Hull.
The buyout has saved approximately 1,600 jobs, but around 2,000 jobs and the 49 remaining stores face uncertainty.
The stores continue to operate as usual, while a buyer is sought.
The home improvement store had been looking to reduce its estate in recent months and Sainsbury’s recently snapped up 11 of its outlets.
The outlets will begin to close next month, before being converted into Sainsbury’s supermarkets.
Homebase’s collapse comes after the retailer went through a string of different owners.
Argos sold it for £360million in 2016 to Aussie conglomerate Wesfarmers, which tried and failed to use it as a UK launchpad for its Bunnings DIY brand.
Despite DIY spending soaring in the pandemic, Homebase racked up losses as costs spiralled, and the cost-of-living crisis then hit demand.
Homebase chief executive officer Damian McGloughlin said it had been an “incredibly challenging three years”.
“A decline in consumer confidence has been exacerbated by persistent high inflation, global supply chain issues and unseasonable weather,” he added.
Why are retailers closing stores?
RETAILERS have been feeling the squeeze since the pandemic, while shoppers are cutting back on spending due to the soaring cost of living crisis.
High energy costs and a move to shopping online after the pandemic are also taking a toll, and many high street shops have struggled to keep going.
The high street has seen a whole raft of closures over the past year, and more are coming.
The number of jobs lost in British retail dropped last year, but 120,000 people still lost their employment, figures have suggested.
Figures from the Centre for Retail Research revealed that 10,494 shops closed for the last time during 2023, and 119,405 jobs were lost in the sector.
It was fewer shops than had been lost for several years, and a reduction from 151,641 jobs lost in 2022.
The centre’s director, Professor Joshua Bamfield, said the improvement is “less bad” than good.
Although there were some big-name losses from the high street, including Wilko, many large companies had already gone bust before 2022, the centre said, such as Topshop owner Arcadia, Jessops and Debenhams.
“The cost-of-living crisis, inflation and increases in interest rates have led many consumers to tighten their belts, reducing retail spend,” Prof Bamfield said.
“Retailers themselves have suffered increasing energy and occupancy costs, staff shortages and falling demand that have made rebuilding profits after extensive store closures during the pandemic exceptionally difficult.”
Alongside Wilko, which employed around 12,000 people when it collapsed, 2023’s biggest failures included Paperchase, Cath Kidston, Planet Organic and Tile Giant.
The Centre for Retail Research said most stores were closed because companies were trying to reorganise and cut costs rather than the business failing.
However, experts have warned there will likely be more failures this year as consumers keep their belts tight and borrowing costs soar for businesses.
The Body Shop and Ted Baker are the biggest names to have already collapsed into administration this year.
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