HOMEBASE has been flogged by its Aussie owner for £1 – putting thousands of jobs at risk.
The deal will see Wesfarmers make a loss of £230million, ending its disastrous foray into the UK, after buying the struggling DIY chain two years ago.
Homebase, which has about 250 stores and 11,500 employees in the UK, is being bought by the restructuring specialist, Hilco, which rescued music chain HMV in 2013.
According to retail experts, the deal could lead to store closures and more job losses on the high street.
Richard Lim, of Retail Economics, said: “The acquisition of Homebase has been an unbelievable disaster for Wesfarmers.
“Their attempts to disrupt the UK DIY market have failed after a series of woeful management decisions, clumsy execution and a misguided perception of the UK market.Which high street stores have closed in 2018? Shop closures in full from Mothercare and Maplin to Toys R Us and Carpetright
“Against this backdrop, the business is bleeding cash and the owners have decided enough is enough.
“Unfortunately, the restructuring will almost inevitably lead to store closures and more job losses on the high street.”
Wesfarmers paid £340million for the DIY chain in early 2016 and has been rebranding shops under the Bunnings name.
Bunnings is perhaps most famous for its “sausage sizzles” – a sausage wrapped in a slice of white bread with tomato sauce.
It opened its first UK store in St Albans in February this year.
So far 24 stores have been rebranded, but once the deal has been completed, they will become Homebase stores again.
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.”
In exchange for paying £1, Hilco will receive control of the entire Homebase business, including its stores, inventory, property and rental lease agreements.
Homebase boss Damian McGloughlin said the agreement with Hilco “marks an exciting new chapter” for the retailer.
The potential store closures come following a miserable few months for the high street, which has seen thousands of jobs disappear after Sainsbury’s, Tesco and Morrisons also swung the axe.
Just last week, Mothercare also announced it will close 50 stores in a bid to save the struggling firm – putting hundreds of jobs at risk.
It is the latest high-street favourite forced to close stores in recent months – with New Look, Carpetright, House of Fraser, Prezzo, Byron and Toys R Us UK all announcing closures.