NI reprieve as Homebase closure plan approved

The vote of confidence in the recovery deal removes immediate worry over Northern Ireland stores
The vote of confidence in the recovery deal removes immediate worry over Northern Ireland stores

Fears for the future of nine Homebase stores and several hundred jobs in the province have been lifted after a recovery plan for the company gained the approval of creditors on Friday afternoon.

The plan includes the closure of 42 stores and the likely loss of around 1,500 jobs through a controversial Company Voluntary Arrangement (CVA).

More than 95% of landlords to the struggling chain voted to approve the proposal at a meeting on Friday, staving off the immediate threat of administration that had threatened Northern Ireland.

“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,” said Homebase boss Damian McGloughlin.

“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.”

The firm said it would try to redeploy affected staff as the latest restructuring comes on top of a store closure programme underway since February.

A total of 16 Homebase stores have been shut this year and the business has also axed 303 jobs at its head office in Milton Keynes.

The latest wave of closures will take place during late 2018 and early 2019. Restructuring experts at Alvarez & Marsal will carry out the CVA.

Earlier this year, Homebase changed hands when it was sold by its Australian owner Wesfarmers to retail turnaround specialist Hilco for £1. It was bought by Wesfarmers for £340m in 2016.

CVAs have been adopted by a host of retailers including New Look, Carpetright and Mothercare, despite the property industry has expressing disdain for the procedure, arguing it leaves them out-of-pocket.