A slice of Australia is about to be extended into St Albans as the country’s largest hardware chain is expanding from Down Under.
The Home Retail Group has today (Monday) announced that it has entered into a share purchase agreement to sell Homebase to Bunnings (UK&I) Holdings Limited, a subsidiary of Wesfarmers Limited, for £340 million.
Over the next few years Homebase will become a Bunnings-branded business.
The firm is renowned in Australia for its fundraising activities to help community groups, and it also supports sports clubs, schools and hospitals with sausage sizzles, cake stalls and garden makeovers.
Since Bunnings was founded in 1886, it has continued to expand its operations throughout Australia and New Zealand, and is the leading retailer of home improvement and outdoor products in both countries.
Home Retail Group, the UK’s leading home and general merchandise retailer, sells products under the Argos, Homebase and Habitat brands. Homebase, which has 265 stores throughout the UK and Republic of Ireland, is the second largest home improvement and garden retailer in the UK, behind B&Q.
A spokesman for the group said that he could not comment on the impact upon St Albans’ Homebase outlets in Hatfield Road and Griffiths Way.
But in a statement the retailer’s chairman, John Coombe, said the group was “very pleased to have reached agreement with Wesfarmers regarding the sale of Homebase.
“We believe this is the best deal for shareholders and for the business.
“Wesfarmers is an experienced and successful retailer with exciting plans to invest in and grow their presence in the UK through Homebase.
“Following completion of this transaction, the board will remain focused on the continuing transformation of our Argos business and the options for delivering shareholder value.”
Wesfarmers, which is headquartered in Western Australia, is Australia’s largest private sector employer, with about 210,000 employees.
Under the share purchase agreement, Wesfarmers will acquire the entire Homebase business, including all its stores and distribution centres. Product brands owned by the group, such as Habitat and Hygena, will be excluded from the sale.
A statement also released today by Wesfarmers said completion was expected in the first quarter of 2016, “subject to approval by Home Retail Group shareholders and its banking syndicate”.
The rationale behind the purchase was that the “£38 billion UK home improvement and garden market is an attractive and growing market”.
Wesfarmers said that it planned to “invest in the Homebase team and reinvigorate core Homebase assets to build a new Bunnings-branded business over three to five years.”
The news has had a mixed response in the media, with an article in The West Australian, “Bunnings off to Old Blighty”, saying “It [will] see an Australian player move into a British retailing market that is often seen as cutting edge”.
Meanwhile an article published by news.com.au asks “Do British people like sausage sizzles?”
It goes on to say: “Bunnings might flop in a nation where people are more likely to rent flats, backyards are too small to have a shed, and it is too cold and rainy to fix up your house on the weekend anyway.
“We have exported a few brands the world has loved – like Ugg boots and Fosters beer. But there are some things we love that foreigners won’t touch. Like Vegemite.”
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