Homebase on the brink of administration putting 130 stores at risk – but ‘Del Boy billionaire’ could save it

HOMEBASE is on the bring of administration putting 130 stores at risk but a “Del Boy Billionaire” could swoop in the save part of the chain.

Chris Dawson, who owns The Range, is considering buying up to 70 stores as part of a pre-pack administration.

This is an insolvency process for a business to sell its assets before appointing administrations.

Mr Dawson, who has been branded the “Del Boy Billionaire”, told The Telegraph: “We are delighted to be able to save so many stores and jobs, and look forward to adding the Homebase brand and subsidiaries to the expanding Range group of companies.”

It comes after The Range stepped in to buy the Wilko name and intellectual property after it collapsed into administration last year.

Homebase is expected to appoint administrators from Teneo to handle the process.

The DIY and garden retailer currently has 130 stores across the country, including in cities like London, Birmingham and Hull.

While the deal has not been confirmed, it could save up to 1,500 jobs.

But 58 stores would still remain at risk of closing for good.

The administrators will then seek buyers for the remaining Homebase stores once the formal administration process has begun.

The move follows reports that Homebase’s owner is preparing to sell the company.

Hilco Capital, which purchased Homebase from Wesfarmers in 2018 for £1, had started a formal sale process after being approached by The Range.

Other retailers that have previously shown an interest in Homebase include B&M, the London-listed discount retailer.

Homebase currently operates around 144 locations across the UK.

It comes after Sainsbury’s revealed it had bought ten Homebase stores with plans to convert them into supermarkets.

Sainsbury’s plans to open the first of these new stores by next summer, marking a significant expansion for the supermarket chain.

The acquisition of the stores and refit programme to follow is expected to cost Sainsbury’s £130million.

Troubled history

Homebase was founded by the supermarket chain Sainsbury’s and Belgian retailer GB-Inno-BM in 1979.

The first store opened in Croydon in April 1981 and was located on the Purley Way.

The company steadily grew and, in 1989, opened its 50th store in Norwich.

By 1995, Homebase had 82 stores, and Sainsbury’s acquired 241 Texas Homecare stores, which were soon converted into the Homebase format.

Homebase then operated as a subsidiary under the Home Retail Group from October 2006 until 2016.

Australian retailer Wesfarmers and owner of the Bunnings brand purchased Homebase for £340million in February 2016.

However, by February 2018, Wesfarmers reported losses relating to the takeover of £57million in the year to June 2017, and soon decided to implement a review of the business.

In May 2018, Hilco bought the hardware store chain for just £1.

Prior to the Hilco takeover, Homebase had 250 stores at its peak and 11,500 staff.

However, the brand soon returned to profit after it entered a CVA agreement and restructured its business.

Homebase has closed 106 stores since it was taken over by Hilco Capital in 2018.

What does going into administration mean?

When a company enters administration, all control is passed to an appointed administrator – who has to be a licensed insolvency practitioner.

Their goal is to leverage the company’s assets and business to repay creditors.

Once the administrator has taken over, a moratorium is placed around the company and stops all legal actions.

After the administrator takes over, there isn’t much that can be done to reverse the process.

How does administration work?

The administrator will write to your creditors and Companies House to say they’ve been appointed.

They will try to stop the company being liquidated but if they can’t, the administrator will pay as much of a company’s debts as possible from the assets.

The administrator has eight weeks to write a statement explaining what they plan to do.

This must be sent to creditors, employees and Companies House and invites them to approve or amend the plans at a meeting.

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