Homebase hunts for new owners to fund next growth stage

DIY retailer Homebase has reportedly started a search for a new owner as it looks for funding for its next stage of growth.

According to Retail Week, Homebase chief executive Damian McGloughlin said the company is hopeful of a deal being completed by April of next year.

McGloughlin reportedly added that there are already a “number of interested parties” exploring a potential deal.

The news comes after Homebase returned to profit in February of this year, recording profits of £3.2m in 2019, compared with a loss of £114.5m in 2018.

As a result, Homebase said the proposed completion of its CVA was likely to conclude 18-months ahead of schedule, due to the strong financial performance.

For the year ended 29 December 2019, Homebase reported a 2.6% increase in like-for-like sales, alongside a 2.8% increase in its gross profit rate, amid new ranges and “improvements” to its in-store and online shopping experience.

The retailer said “nearly” all of its 164 stores were profitable, and added that “effective cost management” across all areas has seen Homebase reduce its cost base by over £180m.

McGoughlin reportedly added that Homebase has also managed to cope with the Covid-19 pandemic, delivering strong sales growth as it was allowed to remain open as an essential retailer.

Homebase was acquired by restructuring specialists Hilco in 2018.

A spokesperson for Homebase said: “Having built an excellent foundation, Homebase is moving out of its turnaround phase and entering into an exciting new chapter of growth. Now is the right time for us to be starting conversations with potential new owners to accelerate our plan.”

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