Wilko proprietor The Range nears deal to purchase Homebase shops

Garden and leisure retailer The Range is reportedly nearing a deal to buy dozens of Homebase stores as part of a rescue deal.

Sky News said on Wednesday that the Plymouth-based firm, whose parent company – Norton Group – owns Wilko, was looking to purchase up to 75 outlets, as well as Homebase’s brand and e-commerce division.

The deal would save a possible 1,500 jobs at Homebase – but another 1,700 workers would continue to face uncertainty.

Possible deal: The Range, whose parent company – Norton Group – owns Wilko, was looking to purchase up to 75 outlets, as well as Homebase’s brand and e-commerce division

Sky reports that corporate advisory firm Teneo was looking to find buyers for another 50 stores if it is appointed as administrator.

It claimed that ‘discount food retailers, DIY rivals and other high street brands’ had registered interest in acquiring such sites.

A sale would end Homebase’s six-year ownership by turnaround specialist Hilco Capital, which bought the business six years ago for just £1 from Australian retailer Wesfarmers.

One analyst described Wesfarmers’ ownership of Homebase after acquiring it for £340million in 2018 as an ‘unbelievable disaster’, beset by ‘woeful management decisions, clumsy execution and a misguided perception of the UK market’.

Homebase enjoyed some growth during the early part of the Covid-19 pandemic as Britons with extra cash sought to revamp their properties.

However, it has struggled over the past few years as higher interest rates and cost-of-living pressures have dampened home improvement spending.

In the 12 months ending January 2023, the company plunged to an £84.2million loss, after making a £30million profit the year before. Its sales also fell from £788million to £701million.

While inflation has significantly abated, Homebase has faced heavy competition from rivals like Wickes and B&Q owner Kingfisher, notes Susannah Streeter, head of money and markets at Hargreaves Lansdown.

She added: ‘Even though interest rates have begun to come down, homeowners have been ultra-cautious, with bigger ticket items hard to shift.

‘Some consumers appear to have been ring-fencing spending for holidays and experiences rather than major makeovers.’

In August, Sainsbury’s bought ten Homebase stores across the UK under plans to convert them into supermarkets of between 15,000 and 40,000 square feet in size.