‘Del Boy billionaire’ rescues Homebase from collapse

Multimillion-pound deal to save nearly 1,600 jobs as DIY chain calls in administrators

Copy link
twitter
facebook
whatsapp
email
Copy link
twitter
facebook
whatsapp
email
A retail tycoon nicknamed the “Del Boy billionaire” is on the cusp of a deal to rescue scores of Homebase stores as the DIY chain calls in administrators.
Chris Dawson, who owns and runs The Range homeware outlets, is finalising a takeover that will result in as many as 70 Homebase stores folded into his shopping empire.
The deal with administrators Teneo is expected to preserve nearly 1,600 jobs across the UK. Up to 1,000 frontline and head office staff are at risk of being made redundant, however, unless buyers for the remaining stores can be found.
Mr Dawson, said to be worth £2.5bn, is also in talks to acquire the 40-year-old Homebase brand and its website in a transaction worth around £30m.
Under the complex plans, administrators are expected to be appointed to the business on Thursday, and the bulk of its assets parcelled off. Mr Dawson’s CDS Superstores – parent company of The Range – is lined up as the primary buyer.
Mr Dawson 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 a year after Mr Dawson swooped on the remnants of Wilko following its collapse.
Mr Dawson, who owns and runs The Range homeware outlets, is finalising a takeover that will result in as many as 75 Homebase stores folded into his shopping empire.
Talks have been taking place to sell a further 10 Homebase stores to various rivals – thought to include Wickes and Topps Tiles – following the sale of 14 of the best sites to Sainsbury’s in recent months.
Although no immediate redundancies are expected, around 34 remaining Homebase outlets, where an estimated 500 people are employed, are at risk of closure. In the meantime, administrators will continue to search for possible buyers. The future of the retailer’s Milton Keynes head office and a further 200 to 300 staff is also uncertain.
The break-up comes after an unsuccessful two-month search for a buyer for Homebase, which has faced a prolonged battle with surging costs. Management has called in insolvency specialists despite the chain showing some signs of progress under its current owner.
Turnaround fund Hilco stepped in to save the chain in 2018 from a short but catastrophic period as part of £40bn Australian retail giant Wesfarmers.
The company’s Bunnings subsidiary paid £340m for Homebase in 2016 as part of ambitious plans to crack the UK but less than two years Wesfarmers offloaded the chain to Hilco for just £1 as it sought to draw a line under one of the worst retail deals of all time.
Homebase racked up more than £420m of losses under Wesfarmers’ ownership, having posted £24m of operating profit in the year before it took over. Retail experts blamed a series of costly mistakes including a decision to fire the entire senior management team and 160 middle managers upon taking control.
Homebase insiders also point to some basic errors that underlined a flawed understanding of shopping habits outside of Australia. These include an attempt to sell barbecues to UK customers during the winter, along with the discovery of a consignment of mole traps that had been dispatched to Ireland despite the country having no moles.
Homebase bounced back into profit during Covid as many Britons turned to home improvement, but was derailed again when ministers reversed a decision to allow DIY retailers to remain open. It received state furlough money and benefited from business rates relief during the first enforced lockdown, however.
The chain was subsequently hit by spiralling freight, energy and labour costs, from which it has struggled to recover. The cost of living crisis has also dampened consumer spending on DIY.
It is understood Homebase racked up nearly £21m of losses in 2023, having slumped more than £40m into the red in 2022. Hilco has offset its exposure by charging millions of pounds per year in consultancy and property management fees during its six years of ownership.
The firm and Wesfarmers have agreed to put in place an employee fund worth several million pounds to help support Homebase staff who are made redundant.
The Range sells homewares, furniture and DIY products from more than 200 superstores around the country, making it one of the largest retailers in Britain. It will also take on the Bathstore, which Homebase bought after it collapsed in 2019.
Mr Dawson, nicknamed “the Del Boy billionaire” because his £250,000 Rolls-Royce Wraith coupe sports the number plate “DE11 BOY”, opened his first store in Plymouth in 1989. He now lives in Monaco.
Copy link
twitter
facebook
whatsapp
email