HOMEBASE has confirmed that it will shut 10 Scottish outlets as part of a store closure plan which threatens around 1500 jobs in the UK.
The retailer is closing 42 British stores via a Company Voluntary Arrangement (CVA), a controversial insolvency procedure used by struggling firms to shut under-performing shops.
The 10 stores set to be shut in Scotland are Aberdeen Bridge of Don, Aberdeen Portlethen, East Kilbride, Dundee, Greenock, Hawick, Inverness, Pollokshaws, Stirling and Robroyston.
Homebase boss Damian McGloughlin 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 under-performance 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.”
The firm said it would try to redeploy affected staff.
Restructuring experts at Alvarez & Marsal will carry out the CVA, which will require the support of landlords.
It was reported in June that bosses were exploring further store closures through the procedure.
The latest restructuring comes after a store closure programme launched in February. A total of 16 Homebase stores have been shut since and the firm has axed 303 jobs at its head office in Milton Keynes.
Explaining its predicament, Homebase said: “Rental costs associated with stores are unsustainable and many stores are loss-making.
“Homebase’s sales performance and profitability declined significantly under the previous ownership over the last two years.
“In addition, the company has faced an extremely challenging retail trading environment, reflecting weak consumer confidence and reduced consumer spending.
“These factors have had a significant adverse impact on Homebase’s trading position.”
Homebase could face resistance from landlords to the CVA, with the property industry expressing disdain for the procedure,arguing that it leaves them out-of-pocket.
CVAs have been adopted by a host of retailers including New Look, Carpetright and Mothercare.
The Homebase store closures follow the sale of the business earlier this year by its former Australian owner Wesfarmers to Hilco, a retail turnaround specialist, for £1.
Homebase was bought by Wesfarmers for £340 million in 2016.
Known for its Bunnings chain in Australia, Wesfarmers attempted to import the home improvement brand to the UK by converting a host of Homebase stores into the Bunnings format. However, the strategy ended in disaster.
Prior to the Hilco takeover, Homebase had 250 stores and 12,000 staff at its peak.
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