Homebase Enters Administration, Putting 2,000 Jobs at Risk

DIY retailer Homebase has gone into administration, placing 2,000 jobs in jeopardy.

Hilco, Homebase’s current owner, had sought a buyer for the struggling chain but failed to secure a complete sale. However, CDS Superstores, owner of The Range, is purchasing up to 70 Homebase stores along with the brand and intellectual property, protecting around 1,600 jobs.

The remaining 49 shops are at risk, with administrators declining to specify their locations. These stores will remain open while buyers are sought, and no immediate redundancies are planned.

The Homebase brand will continue online, while the physical stores acquired will transition to The Range.

Challenges in a Tough Market

Damian McGloughlin, Homebase’s chief executive, acknowledged the unsettling nature of the news for employees. He cited the past three years as particularly challenging for DIY retailers, with declining consumer confidence post-pandemic, high inflation, global supply chain disruptions, and unpredictable weather.

Efforts to restructure the business and attract investment had ultimately failed.

The administrators described the situation as “very difficult and uncertain” and encouraged potential buyers to step forward.

A History of Struggles

The majority of Homebase stores are located in retail parks or out-of-town locations, with only a handful in city centres. Recently, the company sold 11 stores to Sainsbury’s, with three more currently in the process of being transferred.

Hilco took over Homebase in 2018 for £1 from Wesfarmers, which had bought the business in 2016. Wesfarmers’ foray into the UK market proved disastrous, with missteps including underestimating demand for winter products and discontinuing popular kitchen and bathroom ranges.

Hilco implemented cost-cutting measures, but Homebase continued to lose ground, posting an £84.2 million loss last year.

Analysts’ Views

Matt Walton, senior analyst at GlobalData, highlighted how Homebase struggled to regain its market position following Wesfarmers’ ownership, as competition in the homewares sector intensified.

Hargreaves Lansdown noted the ongoing challenges in the home renovation market, as high borrowing costs led homeowners to prioritise holidays over DIY projects. While value-focused retailers such as B&M and Home Bargains have thrived, Homebase failed to adapt.