Loss-making Homebase Ireland - part of Homebase UK and Argos owner Home Retail Group - has entered examinership, it was announced today.
The process will allow the struggling chain of 15 stores to try to re-structure and put the business on a sustainable footing, and to protect as many jobs as possible. It will also give it legal protection against creditors.

However, the company says that to have a reasonable prospect of survival it will need to consider shutting down non-viable stores and, based on both their current trading performance and forecast projections, the Fonthill, Carlow and Castlebar outlets have been earmarked for closure.

Together, they employ 17 full-time and 79 part-time people. Homebase Ireland as a whole has 558 employees.

The future of the remaining 12 stores depends on a number of factors, including securing improved lease terms with the company's landlords.

In the meantime, all Homebase Ireland stores will continue to trade normally during the examinership and all customers' ordered products, pre-payments, credit notes and gift vouchers will be honoured.

The franchise for the three original Homebase stores in the Republic of Ireland was held by the Hampden Group, which Homebase UK acquired in 1999. Homebase Ireland subsequently expanded its operations across the Republic between 2000 and 2009 through the development and opening of new stores.

However, the chain has been hit hard by the economic recession in Ireland and the associated fall in disposable income, the reduction in new house builds and lower consumer spending on repair, maintenance and improvement products.

Sales at the business have slumped by 31% since 2009 and it has been unprofitable for each of the past five years, despite significant remedial action being taken by management. The company says its ability to reduce operating costs have also been restricted by upward-only rent reviews on its store leases.

Commenting on the appointment of Kieran Wallace of KPMG as interim examiner, Homebase Ireland chairman Robert Burke said: "The significant deterioration in consumer spending over the last five years coupled with high rents at each of our stores has made restructuring an imperative in order to re-establish a sustainable business, to secure the future of as many stores as possible and to protect as many jobs as possible. Today's appointment represents an important step in this process."

Mirroring Homebase Ireland's troubles, B&Q Ireland entered examinership in January this year but successfully exited the process in May.