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Wesfarmers working to halt Homebase store closures

Homebase Grantham 725 x 500

John Gillam, CEO of Bunnings, has revealed that upon acquiring Homebase from Home Retail Group in February, the Australian business quashed the former owner’s decision to close a large number of stores, saving hundreds of jobs in the process.

In an interview with Reuters after yesterday’s Wesfarmers Strategy Day in Sydney, Australia, Gillam said:

"There was almost a couple of dozen stores that were on the treadmill heading for closure, with some very advanced.

"We haven’t been able to stop five but we have pulled back seven and we're working hard to pull back another 11."

He added: "It's a line in the sand for the Homebase team to understand that we're here to build a business,"

It is understood that the decision will save up to 700 jobs.

A spokesman said: "New management have successfully reversed the closure of seven Homebase stores, saving approximately 200 jobs. 

"It hopes to prevent the closure of 11 more, saving up to 500 jobs.

"Unfortunately, there have been five unavoidable store closures, with approximately 200 employees affected.

"However, it is worth highlighting that any employees affected are given priority for job opportunities at other stores within a 30-mile radius."

During the Strategy Day, Mr Gillam confirmed that the UK will see the first rebranded Bunnings store in October. Around twelve more stores will follow, but it was made clear that these test branches would need to perform well, or the planned £500m investment would be rescinded.

Since the acquisition, Bunnings has moved Homebase from a high-low pricing strategy, littered with promotions, to an everyday low pricing (EDLP) approach.

Home Retail Group-owned Argos and Habitat concessions have also been closed.

Gillam said that Bunnings intend to reposition Homebase, explaining that performance needs to improve. He added: "The operating margins in more recent times of Homebase have been poor as measured against peer businesses in the UK, both in the sector and across retailing more broadly, and peer businesses globally."

"I think it's a wonderful opportunity."

Read more of our Homebase/Bunnings/Wesfarmers coverage below:

Wesfarmers appoint ex. Masters MD to support Homebase
 
Are Wesfarmers on course for their own Masters disaster in the UK?

Wesfarmers culls Homebase management team

Source : Insight DIY

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23 June 2016

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