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Updated 9.32pm
HOMEBASE IRELAND HAS confirmed earlier today that an interim examiner has been appointed, proposing to close three ‘non-viable’ stores.
The company currently employs 558 people in its 15 Irish stores. In a statement, the company said that the High Court has appointed Kieran Wallace of KPMG as interim examiner.
It said that the purpose of examinership is to “re-structure Homebase Ireland so as to put the business on a sustainable footing”.
“A key element of the examinership process is to protect as many jobs as possible,” it added.
As a result of the economic recession in Ireland and the associated fall in disposable income, reduction in new house builds and lower consumer spending on repair, maintenance and improvement products, Homebase Ireland has experienced a 31 per cent reduction in sales since 2009 and it has been unprofitable for each of the past five years, despite significant remedial action being taken by management. In addition, Homebase Ireland’s ability to reduce operating costs has been restricted by the existence of ‘upward only’ rent reviews on its store leases. This is a situation that can no longer be sustained.
On its Facebook page, Homebase Ireland said that an interim examiner has been appointed but said that all stores will trade as normal during the examinership period.
It also sought to assure customers, saying that all pre-paid goods and services, credit notes and gift vouchers will be “fully honoured”.
While Homebase said that the purpose of the examinership was to protect as many jobs as possible, it said that consideration will have to be given to closing non-viable stores if it is to have a reasonable prospect of survival.
It has proposed closing three stores – in Fonthill, Carlow and Castlebar – with 17 full time and 79 part time employees across the three. These proposals are subject to recommendations of the examnier.
Commenting on the news, Retail Excellence CEO David Fitzsimons said it is a “clear and unequivocal indication that penal upward only rents are placing huge pressure on otherwise sustainable retail businesses”.
Commercial rents in Ireland increased by 240 per cent between 2000 and 2007, a period when consumer prices increased by 30 per cent, Fitzsimons pointed out.
He also said that a number of other retail operators and company’s dependent on the retail industry will enter examinership in the coming weeks.
Fianna Fáil’s Dara Calleary said he hoped that the interests of the over 550 staff at the stores would be “central” to the examinership process.
First published 3.02pm
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Upward only rent again. Time to have a referendum or whatever to get rid of it.
Why not give free rent to all those hundreds of shops that we don’t need?
Its pretty crap to think there’s people out there encouraging the loss of jobs in Ireland:/ glad to know you work somewhere that’s ‘relevant’ enough for you. The business is needed, I’m sure when your light bulbs go or when you need tools for doing jobs about the house or even need paint, you dont head off to tesco for it. But no, you keep rubbing salt in the wounds of 550 people there…
They want a rent reduction just like B&Q got.
Roz,
I just don’t see the merit in Irish tax payers bailing out UK companies who came in to cash in on the Celtic Tiger and now can’t stand the heat in the kitchen. Yes, Irish taxpayers because the buildings owners are probably going into NAMA if their tenants resile from their commitments and Joe Public will pick up the tab again. What about all our local Irish DIY stores that were pushed around by the big lads who are acting the baby now?
Homebase have been in Ireland for nearly 25 years. They took over Texas homecare and have had many staff join from that company. So they didn’t come to cash in on the good times as your ignorance suggests. I’m sure you’re happy to go to all the ‘English owned companies’ when you’re needs can’t be met elsewhere or when the Irish stores are over priced which is probably 90% of the time. I’m not saying I don’t support Irish companies. I do wish there was more, but the fact is, there isn’t, money is tight and jobs are rare. But Homebase has brought a huge amount of jobs to Ireland and I do encourage that. And that’s the point I was making, you just want to be a grump really and its just astounding that you want to close this company in support of Irish companies, but are happy to ignore the great loss of jobs for Irish citizens. I hope staff are kept on because I’m sure they pump their wages into Irish retailers as well as many others.
How could these gang of so and sos be closing down when they were charging €12 for a €3 tube of silicone??
Que the convenient B&Q style “examinership” to get the rents dropped to a pittance on their 20 year “written in blood” leases.
With big threats of “500 Jobs at risk”!!!!
It must be great being a Billion pound Multination
Sher you get the government and courts to do your bidding.
I wonder will the government and courts be as lenient on the Irish taxpayer?
The Irish taxpayer who’ll be picking up the tab for this??
I’m sure the same government and courts will be increasing the financial pressure on the Irish taxpayer to pay for this sham.
my neighbor’s aunt makes $64 every hour on the internet. She has been laid off for eight months but last month her income was $21689 just working on the internet for a few hours. Read more here… can99.ℂom
I’m a capitalist and capitalists believe in survival of the fittest which is ultimately of benefit to all as this promotes customer focus, lean thinking and fair competition. Unfortunately we are communist now, bailing out the weak and poor decision makers, like the banks. There’s merits in each system but we should chose one and run with it instead of choosing communism for the wealthy and capitalism for the poor as according to their whim.
Well let’s wait until you’re facing the dole and go from there so.
Roz,
Thanks for your good wishes.
I was facing the dole this time last year, due to a company cashing out in the way I describe. So I set up my own business and saved some jobs.
Pat,
I wish you all the luck in the world with your business. I want it to be known I totally encourage Irish businesses, but giving that I work for a company with an uncertain future, I think it is right to point out that it’s not just a case of kicking these company’s out, we also need to remember that many Irish jobs will be lost to the recession yet again. Congratulations on your business and well done for investing in an Irish future.
Roz,
Thanks. I hope your employer makes it through, these are tough times for sure and we need the corporates to take a long term view and stick by the Irish workforce through thick and thin. Loyal employers get loyal staff.
Bad news,for its staff,customers and local economies i hope they stay open.I always found it is an expensive shop with a lot of over pricing.
Why, if it’s “an expensive shop with a lot of over pricing” do you want it to stay open?
@Damocles For my budget and my comparison on a like for like basis with some of there products it is over priced.I already answered why I’d like it to stay open.Reread my comment.
But keeping an obviously uncompetitive business open just to help the staff is an exercise in futility. It’s not great for the parent company either.
@Damocles Is it uncompetitive in your opinion,or are you just getting a bit over excited with my comment/opinion??
I’m responding to your comment. It’s part of the discussion and debate portion of this site.
I’m sorry if that bothers you. I’ll leave you to it. Forget I wrote anything.
@Damocles maybe they are competitive but at the sametime with crazy rents and high council taxea why on earth would anyone want to stay and put up with shi*
Terrible news .. Homebase is owned by Argos and could lead to a cascade effect !! Something really needs to be done about the upward only rents its having a devastating effect on business’s even ones we would consider to be top of the table (so to speak )
I worked for HRG that’s the mother company, a few years ago in Avebury, that’s head office in the UK, they had a nick name for Ireland, “the cash cow”, as they made huge profits on everything here. This is all about the rents.
Argos and Homebase are “owned” or operated by Home Retail Group. Argos itself doesn’t own Homebase, it’s finances are separate from Argos.
Lorna, your right but both companies now operate out of Avebury in Milton Keynes. I was involved in the takeover of Homebase and Index, I better not say anymore.
Landlords strangling the life out of Ireland, now where have I heard of that before?
Especially when the Landlords are probably NAMA or some government pension fund. Usually the value of the property is 20 times the yearly lease so basically these boys are artificially cooking the books making it seem like assets are worth more then what they realistically have. Time to bring it all down and let Market demand sort out the price of rent.
Gas the way they run screaming from the markets once they turn sour!
Just a thought..my wife and i are both civil servants,we havn’t lost our jobs BUT we have lost that extra few euros to spend in the likes of Homebase,Woodies etc.For the first year ever I havn’t even bought a plant in one of these shops,money is made to go around if you have it u’ll spend it and by spending it these shops will remain open and will keep people in jobs and will keep people off the dole ques,who in turn will have the extra few euros to spend.When is this government going to realise that taking money out of peoples pockets and putting it into bad banks or bondholders pockets is just not going to work.This is only the beginning,theres been a drip feed of closures,it will have to stop but when……………….when its too late!!!!!!!!!!
What’s most worrying about that article is the fact that a number of other retail outlets will follow in the coming weeks.
Anyone any ideas who they’re talking about?
Any number of the large multiples trading out of the numerous retail parks that opened in the last 10 years. Woodies, B&Q and the first been Brooks have set a precedent for numerous more to follow suit .
read in papers few months back (around the time HMV went into administration) that Argos is in big trouble Papers were saying that they were reviewing their Irish operations and that they were thinking of closing some of their stores
Yep!
Might be a coincedence but alot of their products seem to be out of stock lately
Upward only rents can easily be fixed through taxation. Pass legislation that says if your rental agreement contains an upward only clause, then the rent is subject to 99% tax.
Hard times in the retail sector. Greedy landlords don’t help the situation but the UK has seen retailers such as Comet go to the wall. There simply isn’t as much disposable income about in the middle sector, although the high-end stuff still has a market. The rich are still doing OK.
“Same as it ever was”, to quote Talking Heads.
Sad for the employees.
Who next I wonder.
Homebase is overpriced. I’m sorry to hear people may lose their jobs though.
sure they can all have one of those jobs in Symantec !!
It’s good from a market point of view that some firms go out of business. It may not be great for the people that work there but if a shop doesn’t draw the consumer in its market place it should go to the wall.
In boom times companies can take the rise out on the consumer, prices can go up and people who have more spare money to throw around can do so. But when the economy tightens and people’s spare dosh decreases then businesses that don’t respond to that can and should go to the wall. Businesses that react to the changing market by trimming the fat and becoming more lithe and responsive to changing customer needs can and should prosper, albeit not on the scale they might have before. Then, in time, as the wider economy emerges from the doldrums helped in part by these adaptive businesses they will be poised to ramp things up and take advantage.
However at the same time. Local businesses e.g cafes will suffer not to mention you have an extra 500 people on the dole within a year or so and their demands for goods and services will fall. Like all things it has its positives and negatives
And of those local businesses those that adapt will thrive and those that don’t will fail. Same rules apply.
Adaption also means they may leave. Still I see your point
Homebase are a foreign company who came here when they was buckets of money to be made and are now looking for a way out. Why is anyone surprised.
Larry they may be a foreign company, but they employed plenty of Irish people over the years. And you’re completely incorrect in what you say about them coming here when there was “buckets of money to be made”. I worked in Homebase for many years, and I can tell you that they were operating in Ireland for a very very long time before the boom. While they did indeed expand the number of stores they had during the good times, Homebase emerged from Texas Homecare which had stores in Dublin for the best part of 15 or more years before the good times. Maybe you should check your facts before making any other sweeping generalised comments.
Predictable really. A luxury goods shop. People aren’t going to be buying these goods in abundance during the current economic climate. Also the store faces much competition even in their localities
The crazy system in this country where the retail renter is stuck to increasing rental costs,even as their sales are nosediving, is a major cause of closures and job losses,in US states where rental cost is dependent on sales income, flexibility can be a real life saver.
Homebase are pulling a fast one… Harvey Norman haven’t made a cent since they arrived in Ireland but are honouring the leases they signed up to in good times. It’s all about the leases, nothing else. Homebase’s parent could well afford to cover their losses but are choosing not to. I bet you the landlords are sorry they didn’t seek guarantees from Homebase’s parent company.
It would have cost HN 30 million euro to cancil and pull out of their contracts,its only reason they are still here.
It’s not only upward only rents: we have too many similar type shops for such a small population, add to that the collapse in the building trade and the lack of new houses to be outfitted and its no surprise that this sector is suffering.
Didnt even know they were here.
Say what you like about Homebase, they whipped all the archaic and rude builders merchants into order when it comes to business practices and customer service. If they go away now it will have been to our benefit. The price of their wood might still give me indigestion but I have a nice Sussex harvesting trug made in China.
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