DIY retailer Homebase owed more than £730m ahead of entering administration, while the sale price following The Range’s partial acquisition has been revealed.
Gavin Park, Gavin Maher and Adele Macleod, of Teneo Financial Advisory Limited, were appointed as joint administrators of HHGL Limited, trading as Homebase, on 13 November 2024.
Upon its appointment, subsidiary company’s Hampden Group Limited, based in Northern Ireland, and HHGL ROI Limited, based in Ireland, both entered into administration and provisional liquidation respectively.
In the build up to its collapse, the business experienced challenging trading conditions throughout 2022 to 2023 with total losses reaching £59.3m, placing pressure on its future ability to continue to trade.
It’s position during 2024 didn’t improve with losses attributed to a number of factors including a decline in consumer confidence across the retail and DIY sector, high cost inflation, high interest rates, expensive freight costs, shipping delays and poor weather. The group’s forecast for 2025 and 2026 identified it needed additional funding to survive.
Upon appointment, the joint administrators acting for Homebase, which trades across 133 stores in the UK, completed a sale of up to 70 UK stores, the brand and IP to CDS (Superstores International), trading as The Range and wilko, which was expected to secure up to c.1,600 jobs from Homebase’s total workforce number o c.3,600.
Detailed in a newly filed report, the sale valued a total consideration of £25.6m with 1,148 employees being transferred under TUPE to the purchaser.
This follows the sale of 11 UK stores to Sainsbury’s, with completion expected on a further three. The remaining 49 UK stores will continue to trade as normal whilst the joint administrators continue discussions with interested parties.
As for creditors, the firm behind Homebase owed an intra-group debt to Ark Finco of around £524m when the administrators were appointed. It is understood that Ark Finco is set to suffer a shortfall although it is not determined how much it can recover at this stage.
Furthermore, around 2,305 ordinary preferential creditor claims total c.£938,000 in relation to holiday pay only, while the HMRC is owed c.£12,767k. HHGL Limited also had an asset finance loan facility from Wells Fargo withdrawn to £20.1m, while an £80m working capital finance facility from Ark Finco was also owed. Unsecured creditors, which includes 1,000 claims, are owed a combined figure of £100m. Administrators said it is expected that these creditors could receive a distribution.
