Homebase has gone into examinership.
The company has 15 shops in Ireland and employs over 550 staff. Three stores will likely close, in Fonthill, Carlow and Castlebar. The viability of the remaining 12 stores will have to be reviewed.
The home improvement store says the purpose of the examinership is to re-structure and to put the business on a sustainable footing.
Homebase has suffered a one third reduction in sales since 2009.
The stores will trade as normal during the examinership and all orders, pre-payments, credit notes and gift vouchers will be fully honoured.
The company confirmed this morning that they've filed a petition with the High Court in Dublin seeking the appointment of an Examiner. The Court has appointed Kieran Wallace of KPMG as Interim Examiner.
Of Homebase Ireland's 558 staff, 114 are full time and 444 are part time.
Recession & high rents
The company's blaming the recession for a fall in profits, and upward only rent reviews for unsustainably high overheads.Takings at Homebase have fallen by 31% since 2009 and it has been unprofitable for each of the past 5 years, despite significant remedial action being taken by management.
Homebase Ireland believes that to have a reasonable prospect of survival, consideration will need to be given to closing non-viable stores. Based upon both the current trading performance and forecast projections, it is proposed that 3 of the 15 stores will close. These stores are located in Fonthill, Carlow and Castlebar. In total, they employ 17 full time and 79 part time staff. In addition, the future viability of the remaining 12 stores will depend on a number of factors including securing the agreement of individual landlords of improved lease terms.
These proposals are subject to the recommendations of the Examiner.
Robert Burke, Chairman, Homebase Ireland said: “The significant deterioration in consumer spending over the last 5 years coupled with high rents at each of our stores has made restructuring an imperative in order to re-establish a sustainable business, to secure the future of as many stores as possible and to protect as many jobs as possible. Today’s appointment represents an important step in this process.”
