Homebase sold for £1 putting 11,000 jobs at risk

Australian retail group Wesfarmers has sold Homebase to HMV owner Hilco Capital for a token £1.

Hilco specialises in restructuring and refinancing other companies and will acquire all Homebase assets, including the brand, its store network, freehold property, property leases and inventory for the nominal amount.

Homebase was acquired by Wesfarmers in 2016 for £340m and the sale follows a review of the Bunnings United Kingdom and Ireland (BUKI) business, which considered a range of options to improve shareholder returns. Wesfarmers expects to record a loss on disposal of up to £230m in the group’s 2018 full-year financial results.

Rob Scott, Wesfarmers managing director, said: “The investment has been disappointing, with the problems arising from poor execution post-acquisition being compounded by a deterioration in the macro environment and retail sector in the UK.

“While it is important that we learn from this experience, this should not discourage our team from being bold and diligent in pursuing opportunities to create shareholder value.”

He added: “We acknowledge the past six months have been particularly challenging for the BUKI management and our team members in the UK and Ireland and we thank them sincerely for their hard work and commitment.”