The essential news source for the home improvement industry HTA GARDEN FUTURES

27 OCTOBER 2017 Full coverage from the confererence p13



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“Difficult trading” for Homebase dents Bunnings’ UK sales

Australian retail giant, Wesfarmers Limited announced its Q1 results for FY18 this week, posting declines at its Bunnings proposition in the UK. Bunnings UK & Ireland (BUKI)

reported total sales of £276 million for the quarter, down 17.5% (-13.8% in local currency terms), which the group attributed to the persistence of “difficult trading conditions” for the Homebase estate. Store-on-store sales fell 11.9% for the period.

The early trading performance of the first eight Bunnings Warehouse pilots was described as “encouraging”, with solid sales uplifts achieved across the pilot group.

The coming months will test performance in different seasonal conditions and Wesfarmers said it would continue to trial a range of formats, locations, and competitive environments to achieve proof of concept for its Bunnings Warehouse proposition.

Bunnings Group managing

director Michael Schneider said that, while still early days, the engagement of customers, suppliers, team members, and local communities with the Bunnings stores remains pleasing. Despite steady sales in

core home improvement and garden categories, Homebase’s trading performance relative

to the previous comparable period was adversely affected by the significant clearance of discontinued ranges last year. Mr Schneider explained: “While the performance of Homebase is disappointing, we continue to be encouraged by the performance of the Bunnings pilots. The BUKI team remains focused on stabilising the performance of the Homebase stores as well as delivering proof of concept for the Bunnings format.” There were 244 Homebase

stores and eight Bunnings stores as of September 30, 2017. Coinciding with its latest results, Bunnings opened its ninth pilot store on October 25, converting

the former Homebase outlet in Worle. A total of 15 to 20 pilot stores are expected to be either trading or nearing completion by December 31 this year, subject to relevant approvals.

Meanwhile, Bunnings in Australia & New Zealand saw good growth during the quarter.

Total sales were up 11.5% to $2,964 million, with total store sales jumping 11.7%. Store-on- store growth was up 10.8%. Bunnings continues to expand its portfolio in the regions, with a further 16 sites under construction at the end of September.

Ideabright bought back in pre-pack deal

Retailer Ideabright Ltd, which operates stores in Fulham under the Dibranto, PoshRosh and Cleanup names, has been bought out of administration by one of its directors. According to documents

from Duff & Phelps, Ideabright, which went into administration in August owing creditors more than £2.2million, was bought

by a newly-formed company, Dibranto Ltd, for £70,000. Dibranto, which was incorporated in May this year, before administrators were called in, lists its sole director as Mrs Roshni Patel, former director of PoshRosh Ltd. Duff & Phelps, which has been handling the case, explained in its notice of administrators proposals that

the buyer is “connected to the management”, with family ties to Ideabright and its directors, Manilal and Sulochana Patel. Matt Ingram and Allan Graham

of Duff & Phelps were appointed as joint administrators on August 9 and attempted to sell the business as a going concern, allowing the retailer to continue trading online and instore during

this process. Several parties responded to the sale memo but the only offer to buy the company and its assets came from Mrs Patel via Dibranto Ltd. Her first offer was rejected but a revised offer – which, when broken down, includes £58,998 for stock – was accepted by administrators who said they are satisfied that the business was sold for the “best

price achievable”. Amongst Ideabright’s biggest

creditors in the industry is BIRA Direct, which is owed £143,762.20, distributor Barrus, which is owed £18,833.51, Earlsfield Power Tools at £23,577, Home Hardware Southwest at £10,314.50,wholesaler AB Gee at £9,000, and Draper Tools, which is owed £7,901.19.

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