Homebase

For other uses, see Homebase (disambiguation).
Homebase Limited
Subsidiary
Industry Retail / Home improvement
Founded 1979 (as Sainsbury's Homebase)
Headquarters 489 - 499 Avebury Boulevard, Milton Keynes, Buckinghamshire
Number of locations
 265 stores (United Kingdom)
15 stores (Ireland)
Key people
 Peter Davis
(Managing Director)
Rodney Boys
(Finance Director)
Products DIY Tools
Paint & Decor
Furniture
Homewares
Outdoor Living
Kitchens
Bathrooms
Gardening
Revenue £1.49 billion (2013–14)
Parent Wesfarmers
Website www.homebase.co.uk

Homebase is a British home improvement retailer and garden centre, with stores across the United Kingdom and Republic of Ireland.

Founded by Sainsbury's and GB-Inno-BM in 1979, the company was owned by Home Retail Group from October 2006 until it was sold to Wesfarmers in February 2016. Wesfarmers have announced plans to rebrand the business, under its existing Bunnings Warehouse name within three to five years.

Homebase recorded sales figures of £1.49 billion for the last financial year (2013–2014). Homebase made an operating profit of £18.9 million for the year 2013–2014.

History

Founding

A former Texas Homecare branch in Harrogate, North Yorkshire now in Homebase branding.

Homebase was founded by the supermarket chain Sainsbury's and Belgian retailer GB-Inno-BM in 1979, as Sainsbury's Homebase. This was to bring a supermarket-style layout to the British Do It Yourself (DIY) market. The first store was in Croydon, opening on 3 March 1981, located on the Purley Way.

Expansion

In January 1995, Homebase tripled in size, when J Sainsbury plc bought rival store group Texas Homecare, from the Ladbroke Group plc.[1] These stores were rebranded, and converted to the Homebase format, beginning in February 1996, with the store in Longwell Green, Bristol, with the process being completed by 1999. By the time of the purchase, Texas had staff totaling 11,600, and Homebase had 4,500.[2]

In October 1999, Sainsbury's bought Hampden Group plc, the franchisee of ten stores of Homebase across Ireland. In August 2000, the former chief executive of Texas Homecare, Ron Trenter, made an unprecedented bid for Homebase.[3] In October 2000, Home Depot joined the race to acquire Homebase, but to no success.[4] Home Depot were long rumoured to acquire B&Q, though talks ending in 2005 did not result in any takeover deal.[5]

On 22 December 2000, Sainsbury's sold the Homebase chain, in an two fold deal worth £969 million. In March 2001, the sale of the chain of 283 stores to venture capitalist Schroder Ventures[6] generated £750 million, and the sale of 28 development sites to rival B&Q's parent company, Kingfisher plc, generated £219 million. At the time, the chain had 13% of the United Kingdom market, with 283 stores and 17,000 employees, behind B&Q and Focus Do It All.[7]

Home Retail Group ownership

A Homebase branch incorporating a branch of Argos in Moor Allerton, Leeds. In 2014, Home Retail Group began creating hybrid branches, within formerly solely Homebase branches.

In November 2002, Homebase was sold again, this time to GUS plc (formerly Great Universal Stores plc) for £900 million, where it became part of Argos Retail Group (ARG).[8] On 10 October 2006, GUS completed a demerger of its remaining two businesses, Experian and ARG. ARG was renamed Home Retail Group, within which Homebase operated until 27 February 2016.

In October 2007, it was announced that Home Retail Group had signed a contract for the purchase of 27 leasehold properties from Focus DIY. The purchase price paid was £40 million in cash. The properties were transferred over the period up to 31 December 2007, and were then refitted to the Homebase fascia over the course of several months. No other infrastructure, and no merchandise stock were acquired as part of the transaction, although staff in these Focus stores transferred across to Homebase.

In May 2014, Homebase launched the Homebase Design Centres. The new look stores have a Decorating Ideas and Advice Centre, offering touch screen technology, to help customers transform the look of rooms in their homes.

Following a review of the business, Home Retail Group announced in October 2014 that it would close around one quarter of Homebase stores by 2019. It was also confirmed that it would increase the number of Argos and Habitat concessions within Homebase stores.[9]

In April 2015, former Tesco executive Echo Lu succeeded Paul Loft as Managing Director.[10]

Wesfarmers ownership

On 18 January 2016 it was announced that Australian retailer Wesfarmers would acquire Homebase for £340 million, subject to shareholder approval.[11] The transfer of ownership to Wesfarmers took place on 27 February 2016.[12] Following the transfer of sale, Peter Davis was appointed Managing Director, succeeding Echo Lu.[13]

Wesfarmers announced in June 2016 that it had cancelled the plans by Home Retail Group to close 7 stores, and would seek to prevent the closure of 11 others. It described the closure of 5 additional stores as "unavoidable".[14]

Laura Ashley plc confirmed in October 2016 that it would remove its concessions trading in 22 Homebase stores by mid-2017, as Wesfarmers sought to remove all concessions and adopt the same business model as its Australian and New Zealand business.[15]

Bunnings confirmed in November 2016 that the Homebase store in St Albans would be the first to be rebranded as Bunnings Warehouse as part of a trial, and will open in February 2017. An additional three will be opened by June 2017, with up to six more completed by the end of the year.[16] The stores will adopt a low-cost warehouse model.[17]

Operations

Homebase in Antrim, Northern Ireland

Homebase operates 265 stores in the United Kingdom. In Ireland, the company has a further 15. In July 2013, an interim examiner was appointed by the High Court. Homebase stated the purpose of the examinership was to place the company back on a "sustainable footing".[18]

The company is due to move its headquarters within Milton Keynes in December 2016 from premises currently shared with former sister company Argos.[19]

Supply chain

Early in its history, Homebase used its Sainsbury's experience to move into using central warehouses from which to deliver its stock. By the 1990s, it was receiving the vast majority of its stock into central warehouses, then delivering it to stores. Homebase still receives a few direct deliveries to its stores, from manufacturers and vendors.

Loyalty scheme

In May 2009, Homebase discontinued its own loyalty programme, the Spend & Save Card and replaced it with the Nectar loyalty card scheme, the United Kingdom's largest retail loyalty card. The Spend & Save card had been used by Homebase since 1982, and was believed to be one of the first store loyalty cards in the world.[20]

Homebase allows customers to collect and redeem points within its stores, becoming the first national DIY retailer to participate in this way. Although rival B&Q also have a system for processing Nectar points, this is only available on their website, and even then, points may only be spent, not collected.[21]

Following the sale to Wesfarmers, Homebase announced that they would leave the Nectar loyalty card scheme. Customers can collect and spend nectar points until 31 December 2016.[22]

Advertising

From 1999–2005, Homebase used former Men Behaving Badly couple Neil Morrissey and Leslie Ash as a couple. Morrissey and Ash were the face of the brand for six years, until March 2005, when Homebase launched a series of new advertisements created by Abbott Mead Vickers BBDO, featuring the new slogan "Make a house a home."[23]

From 2006–2009, Homebase used the song "Love Machine" by Girls Aloud in their television adverts. From 2009–2013, "Young Folks" by Peter Bjorn and John featuring Victoria Bergsman is used, During 2009–2010, the transformation of Carlisle railway station was one of the most expensive adverts Homebase has produced to date.

Controversy

In April 2013, Homebase faced criticism following outrage, after a poster from a store in London was released. The poster appeared to highlight the benefits of free labour through work experience, called Workfare. The offending poster depicts a number of volunteer staff at the Haringey branch and is captioned: “How the work experience programme can benefit your store. Would 750 hours with no payroll costs help YOUR store?”"

Homebase released contradictory statements, the first stating 'The company is not signed up to the Workfare Programme' and the second that 'we have decided to make no further commitment to the Job Centre work experience programme'.[24]

Neither statement appears to have deterred groups organising protests, with organisers calling Homebase’s scheme a "profit-driven attack" on workers and benefit claimants. Before adding "We hope Homebase will soon join, Wilko, Superdrug and more than twenty other companies who have ended their involvement with workfare. However we are prepared for further protests in the weeks and months ahead should they fail to do so."[25]

References

  1. ↑ "Sainsbury's buys out Texas DIY". 25 January 1995. Retrieved 4 November 2016.
  2. ↑ "Sainsbury's tipped to buy Texas". 13 January 1995. Retrieved 4 November 2016.
  3. ↑ "Ex-Texas chief may join Homebase bid". 25 August 2000. Retrieved 4 November 2016.
  4. ↑ "Home Depot in Homebase race". 1 October 2000. Retrieved 13 November 2016.
  5. ↑ "US giant targets B&Q DIY chain". 8 May 2005. Retrieved 13 November 2016.
  6. ↑ "Homebase sale completed" (Press release). J Sainsbury plc. 2 March 2001. Retrieved 21 November 2006.
  7. ↑ "Sainsbury's sells Homebase". BBC News. 22 December 2000. Retrieved 30 September 2013.
  8. ↑ "GUS snaps up Homebase". BBC News. 21 November 2002. Retrieved 22 February 2015.
  9. ↑ "Homebase to accelerate store closures". BBC News. 22 October 2014. Retrieved 22 February 2015.
  10. ↑ Tugby, Luke (19 March 2015). "In the news: Homebase's new managing director Echo Lu profiled". Retail Week. Retrieved 2 August 2015.
  11. ↑ Homebase bought by Australia's Wesfarmers for £340m, BBC News, 18 January 2016, retrieved 18 January 2016
  12. ↑ Neilan, Catherine (29 February 2016). "Homebase to be rebranded Bunnings after Wesfarmers completes £340m acquisition from Home Retail Group - now what's happening with Argos?". City A.M. Retrieved 29 February 2016.
  13. ↑ Appleby, Matthew (14 October 2016). "Bunnings pilots will create key opportunities for suppliers". Horticulture Week. Retrieved 28 October 2016.
  14. ↑ Misiri, Talya (23 June 2016). "Wesfarmers to save up to 700 Homebase jobs". Retail Gazette. Retrieved 28 October 2016.
  15. ↑ Greenblat, Eli (25 October 2016). "Wesfarmers revamps UK hardware chain by ditching Laura Ashley". The Australian. Retrieved 28 October 2016.
  16. ↑ "Bunnings unveils pilot store plans to BHETA members". Housewares Live. 8 November 2016. Retrieved 12 November 2016.
  17. ↑ Appleby, Matthew (9 September 2016). "Homebase looks ahead to future renamed as Bunnings". Horticulture Week. Retrieved 28 October 2016.
  18. ↑ "Interim examiner appointed to Homebase Ireland". RTÉ News. 16 July 2013.
  19. ↑ Hardy, Emily (31 October 2016). "Homebase to split from Argos with new headquarters". Retail Week. Retrieved 1 November 2016.
  20. ↑ Smithers, Rebecca (26 July 2012). "How loyal to your reward cards are you?". The Guardian. Retrieved 22 February 2015.
  21. ↑ "Homebase Scrap Spend&&Save Card and join Nectar" (Press release). Homebase. 16 March 2009. Retrieved 16 March 2009.
  22. ↑ "Homebase to leave Nectar points scheme at end of 2016". BT. Love Money. 8 June 2016. Retrieved 28 October 2016.
  23. ↑ "Homebase unveils first advertising for six years without Neil Morrissey and Leslie Ash". BrandRepublic. Retrieved 30 September 2013.
  24. ↑ "Homebase Twitter Statement" (Press release). Homebase. 9 April 2013. Retrieved 11 April 2013.
  25. ↑ "Protest at Bristol Homebase over 'workfare' row". The Bristol Post. Retrieved 11 April 2013.
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