Homebase rescue deal will see some stores turned into The Range

Plymouth retail mogul Chris Dawson has rescued Homebase after it collapsed into administration - saving 1,600 jobs. Mr Dawson’s company CDS Superstores, owner of The Range and Wilko, acquired the Homebase brand name, intellectual property, and up to 70 of its UK stores.

The stores will continue to trade under the Homebase banner but will eventually be turned into The Range stores. The Homebase brand will continue online though.

The long-standing DIY retailer appointed administrators at consultancy Teneo on Wednesday before CDS bought the majority of its stores out of administration. But Teneo said 49 stores which are not part of the deal will continue to trade as normal while administrators try to find a buyer, and the future of another 2,000 workers remains unclear.

Alex Simpkin, CDS chief executive, said: “We’ve stepped in following the sad demise of the much-loved Homebase brand which has had a long and previously successful history of helping UK households with their DIY projects and gardening needs, for over 45-years. The Homebase brand will continue to trade online, and the acquired stores will continue to trade as Homebase over the coming months until they are transferred to CDS when they will quickly re-open as The Range superstores.

“These stores will include everything you’d expect from The Range, combined with much broader choice across garden, showroom and DIY categories - retaining the best of the Homebase expertise and heritage. We plan to continue to invest in the Homebase brand, with many initiatives in the pipeline.”

Mr Simpkin added: “We’re expecting to secure up to 1,600 jobs, with Homebase team members joining the CDS family as part of the 70 store acquisitions. We’re conscious there will be a number of other experienced team members who are facing uncertainty, we’re committed to prioritising interviews for any vacant positions within our The Range and Wilko brands across the country.

“Following the acquisition of the Wilko brand just over 12 months ago and successfully re-launching several trial stores, we’re now in a position to roll out a significant number of Wilko format stores, along with our existing The Range store opening programme, with intentions to more than double the store estate size over the next four to five years. Acquiring the Homebase brand enables CDS to access new customers and reach new Communities. As one of the UK’s fastest growing retailers, CDS continues to seek opportunities to expand its growing portfolio and omni-channel offer.”

Damian McGloughlin, chief executive of Homebase, said the past three years had been “incredibly challenging” for DIY stores, blaming “a decline in consumer confidence and spending” after the pandemic. He said: “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.”

Homebase was bought for £1 by investment firm Hilco Capital in 2018, which introduced a swathe of cost-cutting measures in the subsequent years, closing its Plymouth outlet last year. But the retail chain struggled as customers cut back on spending amid the cost-of-living crisis, and reported an £84.2m loss last year.

In August, Sainsbury’s struck a deal to buy 10 Homebase stores and convert them into supermarkets. The jobs still at risk include workers at Homebase’s head office in Milton Keynes, as well as the remaining stores.

The rescue deal comes after a hunt for a buyer from Homebase’s previous owners Hilco, which is thought to have lasted for the past two months. Mr Dawson, whose CDS acts as parent company to The Range, bought parts of high street retailer Wilko after it collapsed last year.

It is unclear which stores will remain branded as Homebase after the deal, while administrators did not immediately disclose the locations of the 49 outlets which were not included in the deal. The administrators said all employee wages and benefits will be paid for their period of employment, while customer orders will still be fulfilled as far as possible.