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RETAILING


RE-BUILDING THE BRAND


With Homebase reporting strong progress on its turnaround programme since the CVA and a new acquisition now under its belt, Fiona Garcia catches up with CEO Damian McGloughlin to explore his vision for the home improvement and garden retailer


how sorry they were to see him go when he left the Kingfisher chain in June 2017 to take up the role of chief operating officer at Bunnings. And, it’s easy to see why. The Homebase CEO, who admits he never envisioned himself at the helm of the retail chain, has a strong passion for what he does and an ambitious, proactive attitude that, no doubt, means he expects a lot from colleagues but he also delivers ideas in such a way you can’t help but get on board with what he is trying to achieve. He was also renowned at B&Q for getting out to the stores to meet with employees and get a feel for what’s happening at the coalface – a habit he has continued at Homebase.


D


It would appear that his is just the personality needed to turn the fortunes of the struggling chain around and drive it forward with new opportunities; particularly when you consider the company posted a


21.8% jump in gross


profit and £100million cost savings for the last six months of 2018. Imprerssive gains for its first set of results since Hilco’s takeover last June and the CVA that followed. Operating losses for the six-month period also fell 80% year on year, from -£187.3million in the last six months of 2017, to -£33.1million in July-December 2018. Damian and CFO Andy Coleman have taken a hands-on approach and worked hard to motivate the Homebase team after a tough transition following Bunnings’ brief, yet disastrous, ownership of the business. Of course, it hasn’t been a bed of roses, and tough decisions


12 DIY WEEK 06 SEPTEMBER 2019


amian McGloughlin is a popular character in the industry, with a number of B&Q employees stating


had to be made, resulting in the closure of around 70 of Homebase’s 250 stores to date, plus the decision to axe 300 jobs in the Milton Keynes head office and the horticultural buying office in Swindon. The final number of store closures could be closer to 80, as negotiations with landlords on several branches continue under the terms of the CVA that passed last August. Damian admits he was sceptical about the CVA at first but quickly realised it was the most sensible option for the business in order to secure its future and return to profitability. “When the CVA was first proposed, I thought it was a negative thing but I had to do what was right for the business and it ended up being the best thing we could have done.” He adds that the company has been praised for how it handled the process, going into it with a far bigger credit rating than other retail businesses, leading to many people describing it as “the most successful CVA” they’ve seen and heralding it as “an example of how to do a CVA well.”


Right-sizing the estate Addressing the ongoing closures of Homebase branches, which have occupied the headlines, Damian says: “I thought the final number we would be left with would be around 180 but it may be that it dips to 175. It’s about where I thought it would be, to be honest. It isn’t that we don’t care about the team members who lost their jobs or that we don’t know what closing these stores meant but we had to do the right thing for the business.” He continues, explaining the


current situation: “With the stores that we were never going to make any money on, we walked away straight away... We are now negotiating with landlords on what


www.diyweek.net


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