Home Retail Shares Tumble as Homebase Axing a Quarter of its 323 Stores by 2018

DIY retailer Home Base plans to close a quarter of its stores throughout the UK by 2018, according to the firm's parent company.

Home Retail Group said the downsizing decision comes after a strategic review from the FTSE 250 firm's new chief executive John Walden.

"Homebase will pursue a three-year plan through to the end of FY18 to improve the productivity of its store estate, strengthen its propositions and accelerate its digital capabilities by leveraging Argos' investments," Walden said.

"This will position Homebase as a smaller but stronger business, ready for investment and growth."

Homebase currently has 323 outlets across the UK and the reduction over the next four years will see the amount drop to 243 stores.

A spokesperson for Homebase told IBTimes UK said they were unsure, at this moment in time, about how many jobs will be at risk because of the move.

"Part of the plan will be to right-size the store estate through scheduled lease expires and a series of sales to other retailers," the spokesperson said.

"Once they are identified, our colleagues will be the first to be informed about any of the affected stores, and where possible we will redeploy colleagues to other stores within the group, or encourage retailers buying our leases to offer roles within their businesses locally."

Home Retail Group also said that Paul Loft, the managing director of Homebase, plans to step down from the employer when a successor is found.

Home Retail Group posted a 13% rise in underlying first half profit to £30.9m ($49.8m, €39.1m) in the six months to August.

The company also said that sales increased by 3% to £2,669m and that like-for-like sales were up 2.9% at Argos, and up 4.1% at Homebase.

Home Retail shares are trading 3% lower during the first hour of trading at 170.50p.