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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