Homebase is set to close 42 stores, putting around 1,500 jobs at risk, it has been announced.
The DIY retailer is closing the stores via a Company Voluntary Agreement (CVA), a procedure used by struggling firms to shut under-performing shops. The creditors will vote on the CVA on 31 August.
In a statement issued on Tuesday, Damian McGloughlin, CEO of Homebase, said: “Launching a CVA has been a difficult decision and one that we have not taken lightly.
“Homebase has been one of the most recognisable retail brands for almost 40 years, but the reality is we need to continue to take decisive action to address the underperformance of the business and deal with the burden of our cost base, as well as to protect thousands of jobs.
“The CVA is therefore an essential measure for the business to take and will enable us to refocus our operations and rebuild our offer for the years ahead.”
The following stores as those at risk of closure:
- Aberdeen Bridge of Don
- Aberdeen Portlethen
- Bedford St Johns
- Cardiff Newport Road
- Croydon Purley Way
- Dublin Fonthill
- Dublin Naas Road
- East Kilbride
- London Merton
- London New Southgate
- London Wimbledon
- Oxford Botley Road
- Poole Tower Park
- Seven Kings
- Southampton Hedge End
- Swindon Drakes Way
- Swindon Orbital
Shopworkers’ union Usdaw has urged Homebase owners Hilco to keep staff fully informed in the coming months.
National officer Dave Gill told HuffPost UK: “Homebase staff feared the worst when the company was sold for just one pound following the disastrous ownership by Wesfarmers.
“I am seeking urgent clarification from Hilco about their long-term plan to turn the company around. All too often staff are excluded from the CVA process as the future of their jobs are being decided.”
“Clearly there is a huge task ahead, it is crucial that the company listens to the staff and invests in their experience and expertise to turn the business around and again make it a success.”
Homebase currently has 241 UK stores and it is not currently known which ones are under threat. HuffPost UK has contacted Homebase for comment.
Restructuring experts at Alvarez & Marsal will carry out the CVA, which will require the support of landlords.
Homebase has already carried out a separate store closure programme, which saw a total of 17 stores shut in February.
The retailer has also axed 303 jobs at its Milton Keynes head office.
Earlier this year, the business was sold by its former owner, Wesfarmers, to retail turnaround specialist Hilco for £1. Homebase was bought by Wesfarmers for £340m in 2016. At its peak, Homebase had 250 stores and 12,000 staff.
CVAs have been recently been used by retailers including New Look, Carpetright and Mothercare.
Creditors for fashion chain New Look voted for using a CVA to shut 60 of its stores in the coming year back in March.