The UK boss of Bunnings is taking a surprise three-month break as the new Australian owner of Homebase struggles to crack the UK DIY market.
Peter “PJ” Davis will start his extended period of leave in mid-January, a decision that will raise eyebrows in the City.
But the 59-year-old company veteran defended his decision to take time out. He said: “I’ve been away from my family in Australia for three years and I want to take a break and I’m going to take a break.
“We have brought in a number of new senior executives so now seems like a good time. Then I’ll come back fresh as a daisy and get on with it.”
Asked about the performance of Homebase, Davis said: “The business is tough.”
Wesfarmers, the Australian conglomerate, took a massive gamble with its £340m purchase of the struggling Homebase chain in 2016. It intends to give the 250 store chain a complete facelift, spending £500m to turn it into a British version of its successful DIY chain Bunnings which is an Australian institution, famous for low prices and customer service.
But at last count Homebase’s figures made grim reading, with sales tumbling nearly 14% in the three months to September, a disastrous performance blamed on clearing discontinued stock. The chain lost £54m in the first full year of Wesfarmers’ ownership and that figure is expected to increase in the current financial year which runs until June 2018.
Damian McGloughlin who joined from rival DIY chain B&Q earlier this year, is stepping up as acting managing director, the company confirmed.
As well as hiring McGloughlin, Bunnings has drafted in David Haydon from sister chain Officeworks to run Homebase. Haydon, who has worked for Wickes and B&Q, will be acting chief operating officer in Davis’s absence.
But with years of hard work and a lot of cash required to reinvent Homebase there is a question mark over whether new Wesfarmers chief executive Rob Scott, who according to Australian press reports recently visited the UK, will be as committed to the expensive project as his predecessor Richard Goyder. John Gillam, who as boss of Bunnings was a cheerleader of the deal, has also left the group.
At Wesfarmers quarterly update in October, Bunnings group managing director Michael Schneider said: “While the performance of Homebase is disappointing, we continue to be encouraged by the performance of the Bunnings pilots. We will patiently trial a range of formats, locations, and competitive environments to achieve proof of concept.”
There are now 15 Bunnings stores trading in the UK with the most recent Homebase conversion in Bicester, Oxfordshire. At just 36,700 sq ft the Bicester branch is half the size of its big box format Bunnings Warehouse and its success will provide a template for smaller stores in the chain.
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