News, Culture & Society

Homebase owner hangs up ‘for sale’ sign after botched £340m Bunnings takeover

The Australian owner of Homebase has hung a ‘for sale’ sign over the DIY chain after botching its £340m takeover.

It had planned to completely rebrand Homebase as Bunnings – its popular Australian chain – and has already opened 15 of them. 

Wesfarmers has brought in investment bankers from Lazard to review options as it prepares to retreat from the British business it bought in 2016, which operates about 250 stores and employs 12,000 people.

Bodge job: Homebase’s rebranding as Bunnings, the Aussie DIY chain, failed to impress

There had been hopes that Bunnings push into the UK would revitalise Homebase, but British shoppers have compared their layout to ‘a jumble sale’, which has seen Wesfarmers’ losses tripling to almost £100m in the six months to December 31.

Wesfarmers said in February that it was considering closing up to 40 stores. 

Homebase was previously part of Home Retail Group, which also included Argos. This was split up when Homebase was sold to Wesfarmers and Argos was bought by Sainsbury’s. 

Wesfarmers was hammered by its worst profits in ten years after its botched takeover of the UK DIY chain failed to bear fruit.

in February, it revealed group profits plummeted by 87 per cent to £212million, while its UK business was hit by £97million losses in the six months to December 31, compared to losses of £28million a year earlier.

Sales fell 15.5 per cent across Wesfarmers’ UK business to £517million in the six months. 

The Australian firm bought Homebase for £340million in 2016 with plans to rename hundreds of stores after its Australian chain Bunnings. 

The first stores were overhauled and reopened to great fanfare, but the revamp has failed to catch British shoppers’ imagination – and the firm’s endeavours have come at a tough time for the British high street.

Some  stores have been rebranded as Bunnings while others remain Homebase

Some stores have been rebranded as Bunnings while others remain Homebase

A string of household names have revealed their retail struggles in recent months. 

A fortnight ago, Carpetright admitted it would have to close some of its 470 UK stores and tap investors for cash, while Kingfisher revealed that annual profits had tumbled more than 10 per cent and warned of an ‘uncertain’ UK outlook after a recent hit to sales.

The group said B&Q like-for-like sales slumped 5.1 per cent in the final three months of its year.

At the same time, New Look said it would axe 60 shops, as it agreed a restructuring plan with creditors, resulting in the loss of up to 980 jobs. 

That followed Toys R Us stating that it was going to close all 100 of its UK stores after administrators failed to find a buyer – resulting in the loss of 3,000 jobs.

When it launched in the UK, Bunnings unveiled plans to overhaul stores, hire more staff and promised to undercut competitors’ prices by 10 per cent.