The home improvement retailer has confirmed the store on Mallard Road in Bournemouth will cease trading this autumn but shuts down rumours that its Horsham outlet is also at risk, adding that the business “is confident in the future of Homebase Horsham”.
The latest in a series of closures, it has been revealed that Homebase will cease trading from its premise on a retail park in Bournemouth, as the retailer has failed to negotiate a reduction in its annual rent bill of nearly £1million.
Under the terms of its CVA, announced last August, Homebase has been paying £92,000 – just 10% of its £920,000 annual rent – and, whilst a new agreement was set to be negotiated by July, Homebase has opted to close the store after failing to agree a rent reduction with the council which owns the site.
It follows news that 69 Homebase stores are set to shut or have already closed their doors this year. Commenting last month, a Homebase spokesperson explained: “Since the launch of our CVA in August 2018, we have been in conversations with landlords to secure the right rents as part of our efforts to address our fixed cost base.
“Under the terms of our CVA, landlords have the opportunity to end their lease on July 1, 2019, if they would like to pursue other opportunities for the store.”
As a result, Bournemouth, Christchurch and Poole (BCP) Council, which owns the Mallard Road Retail Park, says it is finalising a deal to let the unit – a listed building that formerly served as a bus garage - to another retail operator. The council also passed planning permission to turn the current store into two smaller units in a bid to make the retail park more attractive to prospective tenants.
In a statement, BCP Council cabinet portfolio holder for finance Councillor David Brown explained that Cabinet met on February 20 and, “approved the terms of a new lease for the whole of Unit 1; the unit occupied by Homebase currently, and gave authority to terminate the current agreement with Homebase.”
He continued: “That termination has not yet been served and, under the terms of the lease, there is no provision for either the Council or Homebase to do so until November this year. Whilst we have not received any formal notification of Homebase’s intention to break their lease, it is not unexpected, given the Cabinet decision.”
The store in question is currently hosting a clearance sale, with ‘closing down’ signage at the premises. According to a report in the Bournemouth Echo, the branch is expected to close in September, ahead of the November deadline.
Councillor Brown added: “It is disappointing that Homebase appear to be preparing to close this store earlier than necessary, when several further months of trading from the unit are possible. In the meantime, we are finalising terms for the letting of the whole of the unit to another operator, although we cannot comment further on this matter due to commercial sensitivity.”
Meanwhile, rumours that Homebase will also close its Horsham store in Broadbridge Heath have been quashed by the retail operator. Suspicions had been raised when the store initiated a clearance sale and it was also reported that Bathstore – which Homebase acquired last month – would be closing its Horsham branch. A spokesperson told DIY Week today: “Horsham is one of our green stores and is not in any danger…we are confident in the future of Homebase Horsham.”
The spokesperson added that the Horsham branch is currently running a summer clearance sale, which may have been misinterpreted by some to be a closing-down clearance.