Fate of East Anglian Homebase stores is sealed as creditors push through rescue deal
PUBLISHED: 15:13 31 August 2018 | UPDATED: 15:13 31 August 2018
An East Anglian branch of Homebase is among more than 40 stores which will close under a rescue plan agreed by creditors.
At a meeting on Friday landlords and other parties pushed through the Company Voluntary Arrangement (CVA) to save the beleaguered DIY chain, which has been on the ropes since its Australian parent group announced plans to sell it.
Retail restructuring specialist Hilco, which previously stepped in to save HMV, bought the chain for £1 but has decided that radical cuts are the only way to keep it afloat.
Homebase’s store in Ipswich is one of 42 branches which will close – putting 1,500 jobs at risk – as part of the CVA, which was approved by 96% of creditors.
Its stores in Norwich, Bury St Edmunds, Cromer, Colchester (Stanway), Dereham, Felixstowe, Lowestoft and Sudbury have been spared.
Damian McGloughlin, chief executive of Homebase, said: “We are pleased that an overwhelming majority of our creditors, including such a proportion of landlords, have supported the plans laid out in the CVA. We now have the platform to turn the business around and return to profitability.
“This has been a difficult time for many of our team members and I am very grateful for their continued support and hard work.
“We can look to the future with great confidence, and we will be working closely with our suppliers to capitalise on the opportunities we see in the home improvement market in the UK and Ireland.”
Two East Anglian Homebase branches, in Newmarket and Sprowston, Norwich, were temporarily rebranded as part of a plan by former owner Wesfarmers to covert all Homebase stores to its Bunnings Warehouse brand.
But disastrous financial performance at the chain led Wesfarmers to abandon the strategy and offload Homebase in May, throwing its future into doubt.
It is not the first casualty of the year, with Toys R Us and Maplin both disappearing from the high street and tough times for retailers like House of Fraser, M&S and Mothercare.