Homebase is poised to kick off talks with potential investors

Homebase, led by chief executive Damian McGloughlin and owned by specialist investor Hilco, will begin talks with possible backers next week, a source familiar with the situation said.

The negotiations will centre on fuelling a new phase of growth and follow the sale this week of 10 Homebase leasehold stores to grocer Sainsbury’s. 

Hilco, with its expertise in restructuring, acquired Homebase for £1 in 2018 after a disastrous period of ownership by Australian retailer Wesfarmers, which had paid £340m for the DIY specialist and held it for two years.

Homebase was in the process of being converted to the Bunnings fascia when Wesfarmers exited at a £230m loss.

Homebase, like other home and DIY groups, performed strongly during the pandemic but suffered losses of £84m in its most recently reported financial year to January 2023.

McGloughlin anticipated a return to profit in 2024. However, he told suppliers this week that trading has been tough, although he maintained “we’ve continued to trade ahead of the market”.

He said: “If a sale doesn’t go ahead, Hilco remain supportive. What this does mean is that we will have the opportunity to explore the market and potentially benefit from new investment.”

It is unclear who will be involved in the new round of investment talks. It has been reported that privately owned value giant The Range had approached Hilco about a deal.

Other retailers believed to be interested include value powerhouse B&M.