Homebase it axing over 300 head office jobs after the group was sold restructuring specialist Hilco.
The previous owner Wesfarmers, (ASX: WES), who bought the group two years earlier for £340 million, sold Homebase to Hilco last month for just £1.
“We have not taken this decision lightly but decisive action is required to start rebuilding Homebase’s position in the UK market. We will be providing as much support as we can to help those affected through this difficult time,” said Damian McGloughlin, the chief executive of Homebase.
Speculation surrounds the group and whether it will seek a company voluntary arrangement and renegotiate leases and close up to 80 loss-making stores.
A spokesman for Hilco said the company would be “better prepared for the demands of the UK’s challenging retail environment”.
“The store support centre had served both Homebase and Bunnings brands prior to Wesfarmers’s sale of the business. With the withdrawal of the Bunnings brand it was necessary to realign the team to best serve a single, independent brand.”
Hilco also rescued music store HMV in 2013.
The takeover of the chain by Wesfarmers is regarded as one of the most disastrous retail takeovers. The Australian group hoped to transform Homebase into a British version of its successful Australian DIY chain, Bunnings.
Bunnings struggled to find strong performance amid rivals including B&Q. The group was expected to make a £100 million loss in the first half of 2018 alone.
Whilst the failings of Bunnings was partly due to decisions including the choice to stop selling popular home furnishings, the failure of the group was also down the wider retail environment that has led to widespread closures for Carpetright (LON: CPR) and New Look.
Earlier this year, B&Q, which is owned by Kingfisher (LON: KGF), reported a drop in sales by 5.1 percent and the group’s profits for the year to the end of January fell by 10 percent to £682 million.