The future looks bright for Homebase
Published: 28 February 2020 - Alex Fordham
Homebase has provided a positive 2019 report, with a promising growth plan for 2020.
Homebase has delivered a £3.2million profit, compared with a loss of £114.5m in 2018. Like-for-like sales were up 2.6 per cent and gross margin rate were up 2.8 per cent in the year, as customers responded well to new ranges, and improvements to both in-store and online shopping experiences. This has meant that nearly all 164 stores are now profitable.
Building on its heritage, Homebase has refreshed and expanded its product ranges in home furniture, decorating, kitchens and garden, as well as investing in new products and services.
Driving sales with new and expanded product ranges – working with leading brands and product developers to introduce 3,000 new products to help customers create the latest home trends – has benefitted the company.
Focusing on the in-store experience – £10m was invested in stores in the UK and Ireland, including 51 refurbishments in December 2019, to create brand new inspirational kitchen showrooms, Bathstore concessions and home furnishing departments.
Investing in homebase.co.uk to make it easier for customers to shop with Homebase has also proven key; hundreds of improvements were made to the website over the year, leading to sales increasing by over 50 per cent, with more than half of customers starting their shopping journey online.
Acquiring Bathstore as part of acquisition and concession partnerships strategy has significantly enhanced Homebase’s range and offer, with 49 concessions now open in Homebase stores. Partnerships with leading brands continue to complement Homebase’s range of home furnishing, decorating and gardening products, and provide customers’ need for home and garden projects under one roof.
As well as this, a significant reduction of the cost base by over £180m has paved the way for sustainable growth.
Damian McGloughlin, CEO of Homebase, commented: “18 months into our turnaround, we’re extremely proud of what our team has achieved, working hard with our partners to return to profit and lay solid foundations for growth.
“We have a very clear vision for Homebase, and we’re excited about the plans we have for the future. We will continue to invest in our ranges, services, and team members as we make Homebase the go to place for the inspiration, expertise and products customers need to take their ideas and create homes they love.”
Plans for 2020
In 2020, the company has committed to expanding its product range to be a single destination for home and garden projects. Further strategies are planned, including:
- New store formats – two small standalone stores will be trialled in Cheadle and Sutton, which will be called Decorate by Homebase. These stores will provide options for customers to bring decorating projects to life, from the paint colour and brushes, to flooring and tiling, along with the UK’s key DIY brands.
- Investing in homebase.co.uk – continued digital investment will build a marketplace, where customers can shop from an additional 18,000 products. Next/named day delivery will be launched in March 2020, to make it as easy and convenient as possible for customers to shop with Homebase.
- Continued focus on team development – all 6,600 team members will be trained in Homebase’s new customer service programme in the first quarter of 2020.
Andy Coleman, CFO of Homebase, commented on the company’s 2020 plan: “In the last 12-months we’ve removed over £180m of cost from Homebase, as well as investing to create the right foundation for growth.
“Having returned to profit ahead of plan, we are very well set to undertake further investment in our stores, ranges, the online business and our teams.
“Customer response to the changes we’re making is extremely encouraging, and 2020 will be a very exciting year for our team and customers.”