DIY retailer Homebase sold at a huge loss for just?1" width="976" height="549">
Struggling British retail hardware chain Homebase has been sold by its Australian owner for a nominal fee of
Wesfarmers paid ?340m for the DIY chain in early 2016 and has been rebranding the stores under the Bunnings name.So far 24 stores have been rebranded, but once the deal has been completed, they will become Homebase stores again.In February, Wesfarmers warned that 40 Homebase stores could be closed as it expected profits to fall by 86.6%. Five loss-making Homebase branches were closed between July and December last year.
Nominal fee
Rob Scott, the managing director of Wesfarmers, said: "The investment has been disappointing, with the problems arising from poor execution post-acquisition being compounded by a deterioration in the macro environment and retail sector in the UK."While it is important that we learn from this experience, this should not discourage our team from being bold and diligent in pursuing opportunities to create shareholder value."In exchange for paying ?1, Hilco will receive control of the entire Homebase business, including its stores, inventory, property and rental lease agreements.Under the deal - which is expected to be completed by the end of June - Wesfarmers is allowed to take a fifth of future dividends or capital returns to shareholders.
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