It has been well over a year since investment company, Hilco Capital, paid £1 to acquire Homebase from Wesfarmers, following a challenging period of ownership which saw an operating loss of £128m in 2017.
Hilco has released figures updating on the DIY chain’s turnaround, stating that EBITDA improved £140 million in the first six months under the new ownership and turnover has reached £1bn.
Furthermore, overheads have been reduced by £34m per annum; there has been a 3% rise in gross margin run-rate and improved systems and processes have been put in place to reduce stock loss by more than 30% year-on-year.
Since the acquisition, fifty-two loss-making stores, a distribution centre and multiple remote storage sites have been closed, and 24 Bunnings-branded stores have reverted to the Homebase format.
Hilco states that it worked with Homebase to secure £115m of working capital facilities, putting in place a senior team of staff and consultants to assist with the restructuring of the business and to develop and implement initiatives to improve performance.
The team drove the carve-out of multiple IT systems within a six month TSA period and managed store closures to maximise profitable sell-through of obsolete stock while minimising disruption to the core business.
Hilco Property was appointed to ‘right-size’ the store portfolio and manage landlord negotiations during a CVA which was supported by over 95% of Homebase’s creditors.
In the last month, Homebase announced the acquisition of bathroom retailer Bathstore, taking on 44 of its stores.
Homebase has also confirmed concession partnerships with complementary retailers including Ponden Home (homeware, curtains and bedding), Tapi (carpets and flooring) and Silentnight (beds).
Source : Insight DIY Team and Hilco