ABN - Wesfarmers has sold its beleaguered DIY chains Homebase and Bunnings UK to restricting form Hilco Capital for a meagre sum of £1.
The conglomerate paid AUS$705 million for Homebase in 2016, but wrote down the value of the venture by $1 billion in February.
The initial plan was for the company to use Homebase’s store portfolio to launch its Bunnings fascia and to take on rival brand B&Q, but it has now conceded that its foray in the UK was poorly executed.
Meanwhile, Wesfarmer’s 24 Bunnings stores in the UK will now be ‘promptly’ converted back into Homebase stores.
Managing director Rob Scott said executives would take responsibility for destroying more than $1.7 billion of shareholder value by taking ‘significant’ pay cuts.
Scott has been in the job for six months and is reshaping the group by spinning off its largest business, Coles. He added that the company’s ‘decisive’ exit from the UK would help restore shareholder faith.
The company expects to record a loss of between $350 million to $400 million in its full-year results.