Homebase, the DIY and garden chain, could soon change hands once again as talks with several potential buyers, including The Range and B&M European Value Retail, have emerged.
Hilco Capital, which acquired Homebase for £1 in 2018, is reportedly exploring discussions with various parties regarding the sale of the brand name, intellectual property, and its 170 stores across the UK and Ireland.
Sources familiar with the matter suggest that Hilco may be seeking to divest Homebase after extracting the desired value from the business, marking a potential exit for the turnaround specialist.
The journey of Homebase under Hilco’s ownership began after a tumultuous period under Wesfarmers, its previous Australian owner. Following Wesfarmers’ acquisition for £340 million, Homebase faced challenges including underestimated competition and misaligned strategies with the British retail landscape.
Upon acquiring Homebase, Hilco initiated a company voluntary arrangement (CVA) to restructure leases and shutter unprofitable stores. Subsequently, Homebase improved profitability and renegotiated most of its leases, leading to an early conclusion of the arrangement.
While Hilco initially sought a sale in 2020 amidst a surge in home improvement spending during the pandemic, talks with potential bidders, including Hugh Osmond’s Osmond Capital, did not materialize into a deal.
Speculation suggests that potential buyers such as CDS Superstores International, owner of The Range and Wilko, may consider acquiring parts of Homebase. However, CDS has stated that it is not engaged in active discussions at present.
Industry observers suggest that a sale to retailers like CDS Superstores, B&M, Home Bargains, or Dunelm would align with their product offerings.
Despite uncertainties highlighted in Homebase’s financial statements regarding funding, the company asserts it has received necessary funding and maintains significant liquidity to sustain operations.
As discussions continue, stakeholders await further developments regarding the potential sale of Homebase, marking another chapter in the retailer’s journey amidst evolving market dynamics.
Hilco, Homebase, and B&M declined to comment on the matter.
