Bunnings to take over Home Base

[37114]

Not really a surprise, there wasn't a way back from the mess they were in as they had properly broken the business, lets not forget that 2 years ago this was a profitable business with a loyal customer base that had a clear defined proposition. Unfortunately I don't think there is a fairy-tale ending for Homebase, I feel really sorry for the staff who have already lost their jobs or may do over the coming years.

[ejstubbs]

But they do have $1.60 to spend. Can't even buy a coffee with that!

 

Or even vegemite on toast.

 

Just amazing how they got it so wrong.

 

I think the fact that they've basically thrown in the towel and walked away speaks volumes.  They don't seem to have tried particularly hard, if at all, to work out what they were doing wrong and recover from it.  That smacks of inflexibility, and a certain arrogance.

Edited May 25, 2018 by ejstubbs

[Arthur]

 

Dammit, I bought a sheet of MDF in Homebase Chepstow last week, £14 quid.

 

Had I waited I could have bought the entire store chain, a hot dog on the way home and still had change.

 

 

 

It’s all in the timing.

 

.

[brian777999]

A few years ago Woolworths opened their Masters hardware chain to compete with Bunnings in Australia. After a while Masters threw in the towel ( they didn't seem to try too hard) and wrote off billions of dollars leaving Bunnings with no competition as before. I guess the smug thought they could do anything, anywhere after that !

[Horsetan]

And..... they're gone. No more sausage sandwiches for YOU!

 

https://www.smh.com.au/business/companies/wesfarmers-decides-to-pull-out-of-uk-bunnings-disaster-20180525-p4zhg4.html

 

Meanwhile, at Hilco Capital, let the asset-stripping begin!!

 

Actually, this should please the likes of B&Q and Wickes no end, as they've hardly had to lift a finger to eliminate the competition which now seems to have committed commercial harry-karry itself.

 

Colindale Homebase was shut down at the time of takeover, after 30+ years on the same site, and new blocks of expensive flats have sprouted there like topsy since.

 

Hemel Hempstead Homebase was converted into Bunnings. I've bought a couple of supplies from there (Colindale having been lost forever), and thought it was quite well laid-out. That now looks as if it's going to go down the tubes too....

[34theletterbetweenB&D]

And..... they're gone. No more sausage sandwiches for YOU!

 But the long established and always superior choice in baconsossanegginnabun - and much else -  are still available daily at Wickes and B&Q.

 

That's entirely trivial of course, but it does indicate how Wesfarmers completely misread the competition they would find already in place for their DIY shed operation.

[jjb1970]

I expect that the spin we'll get from the directors is that it is the UK market which is wrong and which wasn't ready for Bunnings rather than it being Bunnings that dropped a monumental klanger.

[cctransuk]

I expect that the spin we'll get from the directors is that it is the UK market which is wrong and which wasn't ready for Bunnings rather than it being Bunnings that dropped a monumental klanger.

 

There are many, many things that we like about Australasia - that's why we go back there as often as possible. The retail environment, however, is definitely NOT one of them.

 

The relatively narrow choice of products; generally dated and uncared-for premises; and take-it-or-leave it attitude in the chain outlets is in stark contrast to the UK retail experience.

 

Sorry,

John Isherwood.

[The Stationmaster]

I expect that the spin we'll get from the directors is that it is the UK market which is wrong and which wasn't ready for Bunnings rather than it being Bunnings that dropped a monumental klanger.

 

It seems pretty clear to me that they completely misread how Homebase fitted into the UK marketplace and instead of playing on the strengths of that they walked into almost head-on competition with Wickes and B&Q (with a dash of Jewson and Gibbs & Dandy thrown in for good measure).  Not clever management to say the very least and as ever the poor s*ds working in the retail frontline get a personal hammering as well.

[Vanders]

It seems pretty clear to me that they completely misread how Homebase fitted into the UK marketplace and instead of playing on the strengths of that they walked into almost head-on competition with Wickes and B&Q (with a dash of Jewson and Gibbs & Dandy thrown in for good measure).  Not clever management to say the very least and as ever the poor s*ds working in the retail frontline get a personal hammering as well.

Absolutely. Homebase were never competition for the likes of B&Q or Wickes; two entirely different concepts. With some overlap I can see how Wesfarmer might have been confused, but only if they completely and utterly failed to do their homework, which obviously was very definitely the case!

[jjb1970]

I know I've already said this, but whereas the Milton Keynes Homebase was very bright and airy and was a very pleasant feeling place, after being converted into a Bunnings it became a dark and dingy warehouse. For people buying hardware and stuff the Bunnings store is great but my wife really was not impressed with the change. And guess who spent money in Homebase and doesn't in Bunnings (it wasn't me......).

[jjb1970]

I feel sorry for the staff as they clearly face a very uncertain future. Trying to return the business to where it was before being bought by Bunnings would be expensive and much of the old customer base has gone elsewhere and would have to be enticed back, not easy. And if the current set up is what the market wanted then presumably they wouldn't be in this mess.

[Chris M]

Being owned by a venture capital company isn’t going to be a comfortable experience. Their plan will be to turn the Homebase business into a pile of cash by whatever means necessary. They won’t worry about details such as ethics or caring for staff.

[jjb1970]

The new owners will be seeking to turn the business around or make a return on their investment (although they only paid £1, they've  taken on a shed load of liabilities so it's not quite the bargain some have called it) for sure. That may be quite a brutal experience. On the other hand they'll almost certainly bring in a management team with some understanding of the market in which they operate.

[russ p]

Being owned by a venture capital company isn’t going to be a comfortable experience. Their plan will be to turn the Homebase business into a pile of cash by whatever means necessary. They won’t worry about details such as ethics or caring for staff.

A real shame as when I've spoken to staff in homebase they say that it has been a nicer place to work since Bunnings took it over.

[34theletterbetweenB&D]

Being owned by a venture capital company isn’t going to be a comfortable experience. Their plan will be to turn the Homebase business into a pile of cash by whatever means necessary. They won’t worry about details such as ethics or caring for staff.

 The ship is sinking. What do you want, effective action however immediately painful, or sweet and cuddly reassurance that your feet aren't going to get wet? The employees largely have to make their own decisions about what might best serve their interests, no management can ever do that for them.

 

The best and most ethical care from management for the existing employees is to salvage as much as possible of their immediate employment prospects, because it is always easier to find work from employment.   

 

Here ends the lesson on 'at all times consider that you alone can paddle your canoe most effectively'.

[jjb1970]

People might like a nice boss but they respect competent and capable bosses and need a boss that can lead a business and provide the corporate success which pays for everybody's jobs.

[kevinlms]

I feel sorry for the staff as they clearly face a very uncertain future. Trying to return the business to where it was before being bought by Bunnings would be expensive and much of the old customer base has gone elsewhere and would have to be enticed back, not easy. And if the current set up is what the market wanted then presumably they wouldn't be in this mess.

Funny thing is, glancing through page 1 again suggests that not many liked Homebase anyway, so why would people want to return it, to how it used to be?

[jjb1970]

Funny thing is, glancing through page 1 again suggests that not many liked Homebase anyway, so why would people want to return it, to how it used to be?

 

A fair point, but it is apparent that whatever its faults far more people liked Homebase the way it was than like Bunnings.

[37114]

The new owners will be seeking to turn the business around or make a return on their investment (although they only paid £1, they've taken on a shed load of liabilities so it's not quite the bargain some have called it) for sure. That may be quite a brutal experience. On the other hand they'll almost certainly bring in a management team with some understanding of the market in which they operate.

Agree, the liabilities that Hilco have taken on is circa £1bn in store leases etc. General view in business press is that Bunnings have got a good exit deal, especially as they are entitled to 20% of the proceeds when Hilco sell it.

 

The new owners are keeping Damian McLoughlin on which should be a good move, he worked at B&Q all his life and was very popular with the B&Q staff as well as being passionate about store standards, something that needs addressing at Homebase pretty urgently.

[Horsetan]

A fair point, but it is apparent that whatever its faults far more people liked Homebase the way it was than like Bunnings.

Homebase branding never really changed over the course of three decades - did familiarity breed contempt?

[jjb1970]

Homebase branding never really changed over the course of three decades - did familiarity breed contempt?

 

I really don't know, but following the Bunnings debacle it does deem that although Homebase had issues of their own they had found their own space in the DIY/home improvement sector. That doesn't mean that Bunnings couldn't re-position the company if they identified a bigger market (companies routinely upset existing customers by implementing changes aimed at growing market share or profit) but to move the company into a new space which it seems didn't really exist at the same time as alienating much of the existing customer was just incompetent and a fully self inflicted disaster.

[34theletterbetweenB&D]

Funny thing is, glancing through page 1 again suggests that not many liked Homebase anyway, so why would people want to return it, to how it used to be?

 Probably has to be borne in mind that the majority of participants on this site were a different set of people from Homebase customers. I cannot recall the last time I visited one, and there were two in easy driving distance from home, one conveniently next door to the Tesco where we have taken my wife's parents for grocery shopping these past 16 years, the other, one of the first Bunnings conversions right next door to what was then my nearest Wickes outlet - which I did use regularly.

[Arthur]

 

A Which survey published today puts Homebase/Bunnings as the 5th. worst High Street shop. The story is mainly about WHS being the worst but the best and worst five are listed at the end of the article.

 

https://www.bbc.co.uk/news/amp/business-44274654

 

.

[Fat Controller]

A Which survey published today puts Homebase/Bunnings as the 5th. worst High Street shop. The story is mainly about WHS being the worst but the best and worst five are listed at the end of the article.

 

https://www.bbc.co.uk/news/amp/business-44274654

 

.

Didn't W H S own Homebase at one time?

Curiously, our local Bunnings occupies the site, not of Homebase, but of a new-build B&Q, which had been in operation for five years at most. I would say that footfall is much greater under Bunnings than either the nearby Homebase or B&Q, both of which had acres of empty car-park.