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The Australian Wesfarmers group has sold the British Homebase chain to the investment company Hilco Capital. With this, the Australians are withdrawing from Europe again. They bought Homebase two years ago and began installing their sales channel Bunnings, which is very successful in its home market, in Great Britain and Ireland.
A company from the Hilco group not only purchased all Homebase and Bunnings stores in these countries, but also the Homebase brand. The 24 locations which had been refitted to the Bunnings brand will be converted back to Homebase stores.
The BBC reports that Hilco obtained the chain for the symbolic price of one pound. According to a press release by the company however, Wesfarmers will participate in a value share mechanism in which it is entitled to 20 per cent of all equity distributions from the company. This agreement has no time limitations, so that Wesfarmers could also profit in the long term if Homebase is resold.According to the report by Wesfarmers, the management team around the new Homebase boss Damian McGloughlin, who was only recruited in February, will remain in office. The sale is to be completed by 30 June 2018.
Wesfarmers also blames the failure of its European expansion on the consumer climate in Great Britain. "The investment has been disappointing," says Managing Director Rob Scott. He states that the problems arose through poor execution after acquisition, which was worsened by the deterioration of the macro-economic environment and the retail sector in Great Britain.
The disposal of the British subsidiary does not come without massive financial consequences. The Australian group has announced a record loss of GBP 200 mio to GBP 230 mio for the results of financial year 2017/2018.
A company from the Hilco group not only purchased all Homebase and Bunnings stores in these countries, but also the Homebase brand. The 24 locations which had been refitted to the Bunnings brand will be converted back to Homebase stores.
The BBC reports that Hilco obtained the chain for the symbolic price of one pound. According to a press release by the company however, Wesfarmers will participate in a value share mechanism in which it is entitled to 20 per cent of all equity distributions from the company. This agreement has no time limitations, so that Wesfarmers could also profit in the long term if Homebase is resold.According to the report by Wesfarmers, the management team around the new Homebase boss Damian McGloughlin, who was only recruited in February, will remain in office. The sale is to be completed by 30 June 2018.
Wesfarmers also blames the failure of its European expansion on the consumer climate in Great Britain. "The investment has been disappointing," says Managing Director Rob Scott. He states that the problems arose through poor execution after acquisition, which was worsened by the deterioration of the macro-economic environment and the retail sector in Great Britain.
The disposal of the British subsidiary does not come without massive financial consequences. The Australian group has announced a record loss of GBP 200 mio to GBP 230 mio for the results of financial year 2017/2018.
