Wesfarmers, the Australian owner of DIY chain Homebase, has seen its share price drop almost 5% following news that 2,000 Homebase staff could be axed and up to 40 UK stores shut.
Wesfarmers, which owns Homebase’s parent firm Bunnings UK, said today that trading at the chain had been “poor” as it revealed a £454m impairment charge linked to its acquisition of the retailer.
In a statement to the stock market, Wesfarmers managing director Rob Scott said. “The Homebase acquisition has been below our expectations which is obviously disappointing.
“In light of this, a review of Bunnings UK has commenced to identify the actions required to improve shareholder returns,”
The group also confirmed that between 20 and 40 of the worst performing Homebase stores could be shut. Homebase operates from 250 stores across the county and employs 12,000 in total in the UK.
Poor trading at Homebase is expected to drag Bunnings into an underlying loss of £97m for the first half of the year, Wesfarmers confirmed.