Homebase sales up as Wesfarmers tackles 'poor and confusing offer'

Hombase like-for-like store transactions jumped 7.5% in the first four months of Wesfarmers owning the business, the Australian retailer revealed in a full-year update. The increase was driven by new merchandising, pricing and marketing strategies, it said. 

Overall Wesfarmers said trading had been “steady” at Homebase.

Wesfarmers, which acquired Homebase for £340m in February from Home Retail Group, is planning to convert the stores to its successful DIY fascia Bunnings.

Four to six pilot Bunnings stores are planned for the UK by the end of next June, it said. The first is expected to open in October.

Bunnings boss John Gillam said investment in the wider roll-out of Bunnings would depend on the success of the pilots. “Proof of concept is a critical step,” he said.

Gillam also revealed that £60m has been invested to address Homebase’s “poor and confusing offer”. He added: “The offer is now very firmly focused on the home improvement and garden market.”

In April it emerged that Wesfarmers was cutting nearly 20% of Homebase’s head office staff. The Australian giant also culled Homebase’s senior team, bringing in Bunnings veteran Peter Davis to run the business.

Former Asda boss Archie Norman, who has been an adviser to Wesfarmers since 2007, has also been appointed to a three-man advisory board to guide Bunnings in the UK.

As a group, Bunnings reported EBITDA rose 11.5% to AUS$1.21bn (£700m) in the 12 months to June 30. However, Wesfarmers posted an 83% slide in net profits to AUS$407m (£234.9m) owing to write-downs at its coal business and retailer Target.