HOMEBASE the giant DIY retailer has managed to avoid going into administration. It was feared that at least 11,000 jobs could have been lost had the landlords refused to accept the Compulsory Voluntary Arrangement (CVA).
The proposed CVA includes the closure of 42 stores with rents cut on others as Homebase owners Hilco Capital attempt to rescue the retailer from administration.
It was reported that 70 per cent of Homebase’s stores were losing money.
The business was acquired for £1 in June by Hilco, who plan to turn it around within three years. Their aim is to bring back formally popular lines of product including its soft furnishings.
They also promised to spend £25 million of capital and up to £116 million of debt on the business.
Following negotiations Homebase creditors have approved the CVA and the proposal to close 42 stores, which still places 1,500 jobs at risk.
The decision approved by 95.92 percent of the company’s creditors has provided a lifeline for the home improvement retailer, which had been on the brink of collapse.