Essential reading for retailers and suppliers in the home improvement market

Homebase future hangs in the balance as votes cast on CVA

Published: 31 August 2018 - Jenny Wonnacott

Creditors are meeting today to cast a 'make it or break it' vote on the future of Homebase.

The beleaguered DIY chain, which recently revealed that 70% of its outlets are losing money, has proposed the closure of 42 stores. As part of its Company Voluntary Arrangement (CVA) it has also proposed cutting rents by up to 90% on some of its remaining stores.

Homebase could face administration if creditors do not back the proposed CVA today
Homebase could face administration if creditors do not back the proposed CVA today

However, it has been revealed that several landlords likely to be affected by the CVA are now considering legal action against the retailer. Corporate advisor firm Begbies Traynor and law firm Hogan Lovells have been hired by several landlords who will be affected by the proposed drop in rental payments.

Landlords M&G and Aberdeen Asset Management are said to be among those considering legal action against the retailer. Both landlords have reportedly said that the rental cuts – between 25% and 90% across 70 stores – are too steep.

Homebase owner Hilco Captial, which bought the chain for just £1 from Wesfarmers back in May, has now said that if the CVA is not approved, Homebase will “very likely” go into administration.

The private equity firm has proposed a revival of the brand over three years, with the promise of a £25m investment and up to £116m of debt – but this all rests on creditors backing the CVA.

The proposed changes to the store portfolio will mean redundancies from those stores earmarked for closure. The process is expected to lead to a reduction of up to 1,500 roles.

Hilco is known for having revived struggling retailers, most notably HMV which was brought back from the brink of administration back in 2013. However, the firm was unsuccessful in its attempts to save Allders and Allied Carpets.

Comments


(Your email address will not be published)
Already Registered?
Sign In
Not Yet Registered?
Register
Printable View E-mail Bookmark
*

What do you think?


Do you think enough is being done to secure connected/smart home products from hackers and cybercrime?


Latest reader comments

re: B&Q sales dip 2.5%, as showroom sales decline

B&Q bob
Screwfix sales are up because they position new stores close to B&Q stores but then price like for like products cheaper than within BQ ...

re: B&Q kicks off kitchen & bathroom recruitment drive

B&Q bob
Wickes are not alone, Wrens kitchens has seen large numbers of unappreciated BQ kitchen sales staff join them because of BQs attitude ...

re: Toolstation.com excels in Which? website survey

Roger Bishop
This was my first visit to toolstation in farnham but it will definatly not be my last the service was exceptional staff were welcoming i ...

re: Graham Bell to head up B&Q as part of Kingfisher reshuffle

B&Q bob
Ms Laury has overseen perhaps the worst period of BQ history under her leadership, staff have had their wages cut while witnessing their ...

re: Screwfix opens 600th store as business continues to build

B&Q bob
Why is kingfisher giving screwfix lower prices to sell at than their BQ stores? Staff in B&Q suffer constant abuse from trade customers ...

Most read stories

Blog and Comment

Dawn of a new age in customer service

Customer service used to be about answering telephones and responding to written requests, but our fast paced, social media driven society ... Read More >>