Sales at Homebase plummeted 20% in March as the “beast from the east” added to the woes of the Australian-owned DIY chain.
Perth-based Wesfarmers said the cold snap had played havoc with demand for plants and garden furniture, resulting in a fresh setback for the struggling chain.
UK retail sales continue to disappoint in April
The dire March trading meant like-for-like sales in the first three months of 2018 were down 15.4% on the same period last year – even worse than the 15.1% decline posted in the previous quarter.
Wesfarmers had planned to convert the chain into an outpost of its successful domestic chain Bunnings, which, in Australia at least, is famous for low prices and sausage sizzles. So far only 23 of Homebase’s 250 stores have been converted to the Australian brand and it is unclear whether the group will continue with the costly refurbishments.
Earlier this year the Wesfarmers managing director, Rob Scott, said the conglomerate was considering pulling out of the UK after what has been billed as one of the most disastrous retail takeovers ever seen. In February, Scott said the group was writing off A$1bn (£543m) after bungling the 2016 takeover.
Wesfarmers bought Homebase for £340m two years ago but it is now understood to be considering offering more than £100m to find a buyer. Another option would be to pursue a company voluntary arrangement (CVA), an insolvency procedure being used by New Look and Carpetright to dump loss-making stores.
The collapse in Homebase sales has in part been self-inflicted after the original Australian management team axed senior managers and key departments, including home furnishings, which had appealed to British shoppers. The former B&Q executive Damian McGloughlin has been drafted in to run the chain.
The Bunnings group managing director, Michael Schneider, said it was making “satisfactory” progress on several Homebase projects focused on areas such as improving store standards, ranges and promotions.