Southport Homebase has been sold to Australian company Bunnings along with 264 other stores.
Homebase will disappear from the UK market and be replaced by the Australian brand Bunnings after Home Retail Group accepted a £340m bid for the troubled DIY chain.
Bunnings, an Australian institution, is the country’s number one hardware retailer and will be hoping to bring its winning combination of low prices, huge range and excellent customer service to the UK market.
The acquisition of 265 Homebase stores will make it the second largest home improvement and garden retailer in the UK and Ireland and give it a position to challenge B&Q.
Watch out Wickes and B&Q: Bunnings is coming for your DIY customers
“Bunnings is well placed to unlock value from the Homebase business and has a proven track record in delivering growth, both organically and through acquisition,” said Richard Goyder, managing director of Bunnings owner Wesfarmers, which also owns the leading Australian supermarket, Coles.
“The £38bn UK home improvement and garden market is a large and growing market with strong fundamentals.”
Bunnings, which uses staff to front its television adverts, is also known for its “sausage sizzles” outside stores where local sports or community groups are allowed to set up stalls and sell food to customers.
Goyder sought to reassure investors over a move that comes with the Australian dollar having declined about 30% against the British pound over the past three years.
“The opportunity to enter this attractive market through the acquisition of Homebase has been comprehensively researched and carefully considered by Wesfarmers and Bunnings,”
Goyder said: “The Bunnings team has done a lot of work to make sure it understands the market and the opportunity, including having visited hundreds of stores, spending significant time researching the market and closely studying international retail expansions into the UK and other markets.”
The cost of overhauling the stores means the acquisition from the UK’s Home Retail Group is expected to have an immaterial effect on Wesfarmers’ earnings per share and return on equity for three years, after which it is projected to contribute positively.
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