- The damage to Wesfarmers from the sale of its Homebase business in the UK will be between £200 million ($A350 million) and £230 million ($A404 million).
- The sales price wasn’t announced but the company bought the Homebase chain of stores in January 2016 for $A705 million.
- Homebase is going to Hilco Capital, which specialises in distress investments and corporate restructures.
Wesfarmers’s experiment in the hardware business in the UK, trying to replicate the success of its Bunnings chain in Australia, is finally over.
The company just announced the finalisation of the sale of its Homebase business to a company associated with Hilco Capital, which specialises in distressed investments and corporate restructures.
“Wesfarmers expects to record a loss on disposal of £200 million ($A350 million) to £230 million ($A404 million) in the Group’s 2018 full-year financial results,” the company announced.
It planned to re-brand Homebase as Bunnings as part of a strategy to expand its ultra-successful Australia hardware brand offshore.
But the UK business struggled to take off, and Wesfarmers put the struggles down to poor execution and a weak macro environment as retail sales slumped in the UK.
That was reflected by a $795 million write-down of the Homebase acquisition on Wesfarmers’ books in February this year.
The sale follows Wesfarmers’ announcement in March to spin off Coles into a separate ASX-listed company.
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