CDS Superstores acquires 70 Homebase stores out of administration
All employee wages and benefits will be paid for their period of employment
The Range and Wilko owner CDS Superstores has acquired 70 Homebase UK stores after the DIY retailer collapsed into administration.
Gavin Park, Gavin Maher and Adele Macleod of Teneo Financial Advisory Limited were appointed as joint administrators of HHGL Limited and Hampden Group Limited, which trade under the Homebase name.
Immediately following the appointment, the joint administrators acting for Homebase completed a sale of up to 70 UK stores, the brand and IP to CDS (Superstores International), which is expected to secure up to c.1,600 jobs.
Homebase stores will continue to trade until handed over to CDS.
Homebase had recently completed the sale of 11 UK stores to Sainsbury’s and has exchanged on a further three.
The remaining 49 UK stores will continue to trade as normal whilst the joint administrators continue active discussions with interested parties.
Homebase is a home and garden improvement retailer with stores across the United Kingdom and Ireland.
Like many retailers in the home improvement sector, Homebase has experienced a decline in sales over the last three years resulting from “worsening consumer confidence and available discretionary spend.”
This reduction in demand has coincided with a rise in input costs and supply chain disruption.
Homebase has been exploring a number of options to support the future of the business and despite a recent improvement in trading performance, these efforts were insufficient and therefore the directors took the difficult decision to appoint administrators.
At the date of appointment, Homebase employed 3,600 staff across its head office and stores, including those employees expected to transfer to CDS as part of the transaction.
There will not be any immediate redundancies whilst the administrators urgently assess the position of the companies. All employee wages and benefits will be paid for their period of employment. Customer orders will also still be fulfilled as far as possible and arrangements will be put in place to allow gift vouchers to be used.
Damian McGloughlin, CEO of Homebase, said: “It has been an incredibly challenging three years for the home and garden improvement market. A decline in consumer confidence and spending following the pandemic has been exacerbated by the impact of persistent high inflation, global supply chain issues and unseasonable weather. Against this backdrop, we have taken many and wide-ranging actions to improve trading performance including restructuring the business and seeking fresh investment. These efforts have not been successful and today we have made the difficult decision to appoint administrators.
“My priority is and continues to be our team members, and I recognise that this news will be unsettling for them. The sale of up to 70 UK stores to CDS is expected to protect up to 1,600 jobs and the remaining 49 UK stores will continue to trade as normal while the Administrators complete discussions with potential buyers. I want to thank our team members and supplier partners from the bottom of my heart for their hard work and commitment over many years.”
