BROMSGROVE’S Homebase will stay open under the restructuring plan put together by the company which bought the business for £1.
HHGL Limited announced the news earlier today, adding it would launch a Company Voluntary Arrangement (CVA) and was seeking approval from creditors on a proposed plan to reduce its cost base in the UK and the Republic of Ireland.
The Droitwich store, however, will be one of 42 which will be closed either at the end of the year or early next year.
The decision followed a comprehensive review which found the current store portfolio was no longer viable.
Rental costs associated with the stores were deemed unsustainable and many stores were labelled loss-making.
Homebase’s sales performance and profitability declined significantly under the previous ownership over the last two years and the firm had struggled in its market.
The CVA is aimed at providing all creditors with a better outcome than other likely alternatives and cutting its costs to provide a stable platform so it can turn around its fortunes.
The company confirmed there would be redundancies from the stores earmarked for closure with 1,500 jobs going across the country.
Damian McGloughlin, CEO of Homebase, said: “Launching a CVA has been a difficult decision and one that we have not taken lightly.
“Homebase has been one of the most recognisable retail brands for almost 40 years, but the reality is we need to continue to take decisive action to address the underperformance of the business and deal with the burden of our cost base, as well as to protect thousands of jobs.
“The CVA is therefore an essential measure for the business to take and will enable us to refocus our operations and rebuild our offer for the years ahead.”
Stephanie Pollitt, Assistant Director of Real Estate Policy, British Property Federation (BPF), said: “Ultimately, it will be for individual property owners to decide how they will vote on the CVA, but the proposal has sought to find a solution that provides a sustainable future for Homebase.”