The dramatic fall in house prices in the last five years coupled with cut-throat price competition in the DIY market has sent the industry into a decline.
Sainsbury's will close 50 stores costing up to £50m and will re-brand the Texas image to reflect its own Homebase chain. It also intends to close Texas' head office in Wellingborough, Northamptonshire. The functions will be moved to the Homebase headquarters in Wallington, Surrey. Texas has 11,600 staff and Homebase 4,500.
David Sainsbury, who chairs Britain's biggest grocery chain, said yesterday: "This is a unique opportunity and another step in our diversification programme."
Usdaw, the shopworkers union, said it would be seeking meetings with Sainsbury's today to talk about the company's redundancy plans. However a union spokesman said Texas' prospects were likely to be better under Sainsbury's than as part of the Ladbroke group. Ladbroke has moved out of retailing to concentrate on its betting and hotels businesses.
The acquisition moves Sainsbury's Homebase from fourth to second in the DIY market, behind B&Q. The deal also marks a new phase in the DIY market which boomed with house prices in the 1980s but has fallen on hard times during the housing slump.
New aggression, page 32Reuse content