Homebase’s creditors have approved plans to close 42 stores in the UK and Ireland, representing circa 20% of its 250-store portfolio.
Proposals for a company voluntary arrangement – a controversial insolvency process that allows retailers to cut rent bills and close loss-making stores as part of a turnaround plan – gained approval from 96% of creditors. It will lead to 1,500 job cuts.
However, the outcome may prompt legal action from some of the retailer’s landlords, who have reportedly appointed law firm Hogan Lovells to look at challenging the CVA.
Research from Radius Data Exchange shows that 1.6m sq ft will be relinquished after these latest store closures, which are expected to take place during late 2018 and early 2019.
This brings the total retail space relinquished following CVAs and administrations in the UK this year to 15.6m sq ft.
See also: Landlords call for CVA reforms
Damian McGloughlin, chief executive of Homebase, said: “We are pleased that an overwhelming majority of our creditors, including such a proportion of landlords, have supported the plans laid out in the CVA.
“We now have the platform to turn the business around and return to profitability. This has been a difficult time for many of our team members and I am very grateful for their continued support and hard work.
“We can look to the future with great confidence, and we will be working closely with our suppliers to capitalise on the opportunities we see in the home improvement market in the UK and Ireland.”
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