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Creditor document states majority of Homebase stores are losing money

Homebase Bicester 725 x 500

The Financial Times has reported that it has seen a document which states that over 70% of Homebase's stores are losing money.

The document is understood to have been put together for Homebase's creditors as the company seeks to close 42 stores and secure rent reductions of up to 90% on around 70 others, as part of a Company Voluntary Arrangement (CVA).

The document also suggested that concessions such as Habitat and Laura Ashley could be reinstated alongside popular products that were jettisoned by Wesfarmers. 

Hilco, Homebase's current owner, who bought the business and its debt for a nominal sum in May 2018, will provide a £25m equity boost if the CVA is approved.  The document is understood to state: "If the CVA is not approved, then it is very likely Homebase will go into administration or liquidation"  

The Financial Times reports that a number of landlords are likely to reject the CVA, with feedback including:

"I cannot see any upside for me in supporting this CVA"

“I don’t see why people who’ve done right by the company should lose out purely because of mismanagement and a lack of commercial nous.”

Homebase's creditors are due to vote on the proposed CVA next week.

Source : Insight DIY

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24 August 2018

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