The owner of DIY retail chain Homebase has announced it is to close one quarter of its stores, putting over 4,000 jobs at risk.
In its H1 2014 statement, Home Retail Group (HRG) confirmed it will close one in four of its 323 stores, which are “unprofitable or are in decline”, as part of a turnaround strategy.
The company has stated it aims to close 30 stores before the end of 2014.
HRG, which also owns the Argos and Habitat retail brands, posted pre-tax profit of £13.5m in the six months to 30 August, with like-for-like sales growing at Argos and Homebase 2.9% and 4.1% respectively.
Homebase recorded sales of £834.5m in the six months to 30 August, up from £822.3m in 2013.
Despite improved sales, HRG said the chain faced a challenging marketplace, coupled with “inconsistent store opening standards and a large estate with low sales densities that result in a challenged financial model.”
HRG said in its half-year statement that Homebase possessed “the opportunity to grow and create meaningful shareholder” in the long term.
“However such growth will require Homebase to first undertake an ambitious agenda to address its store and digital foundations, which constrain its future success.”
HRG also confirmed that Homebase managing director Paul Loft is to part ways with the company.
John Walden, chief executive of HRG, said: “Homebase is a good business with the basis for future growth.
“In this context, Homebase will pursue a three-year plan through to the end of FY18 to improve the productivity of its store estate, strengthen its propositions and accelerate its digital capabilities by leveraging Argos’ investments.
This will position Homebase as a smaller but stronger business, ready for investment and growth.”