Homebase to close 42 stores, putting 1,500 jobs at risk

Creditors vote in favour of turnaround plan,staving off the immediate threat of administration

Homebase will close 42 stores, putting around 1,500 jobs at risk after creditors approved proposals aimed at turning around the struggling chain.

Creditors voted for Homebase's Company Voluntary Arrangement (CVA), an insolvency procedure used by struggling firms to shut under-performing shops.

The procedure has proved controversial with many landlords claiming that retailers have used it to avoid rent payments

But over 95 per cent of Homebase's landlords voted to approve its CVA at a meeting on Friday, staving off the immediate threat of administration.

The stores will close during late 2018 and early 2019.

Homebase first announced the proposal to shut the stores earlier this month, saying that said it had “faced an extremely challenging retail trading environment reflecting weak consumer confidence and reduced consumer spending”.

Australian company Wesfarmers sold the loss-making retailer to restructuring specialist Hilco Capital for just £1 in May, two years after buying it for £340m.

Wesfarmers had planned to rebrand Homebase as Bunnings, the name of the group’s DIY chain in Australia, but said it would cost too much to turn the UK business around.

Describing the purchase as “disappointing”, Wesfarmers boss Rob Scott said: “Problems arising from poor execution post-acquisition being compounded by a deterioration in the macro environment and retail sector in the UK.”