Homebase managing director Paul Loft insisted the DIY retailer performed “as well as we could” in a difficult market after reporting a full year profit slump.
Benchmark operating profit tumbled 52% to £11m in the year to March 2.
Loft said: “Against a very difficult market place we did as well as we could and we gained share.”
He added that the wettest April on record last year and the unseasonable weather since had hit sales, predominantly in gardening, which accounts for 27% of total revenue.
“We’ve got the largest garden mix so it affected us the most. But we’ve managed well. We managed not to decimate margin, in fact we improved it,” he said.
The retailer is likely to have been affected this April too, when gardening sales were blighted in the cold snap.
Loft said Homebase has worked hard to try and shield itself from volatile weather, by using a predominantly UK supplier base, switching adverts to suit the weather and delaying stock.
He said over time the weather evens out. “In 10 years you’d get a couple of good years, a couple of bad and the rest about average,” he said.
Like-for-likes declined 4.9% while total sales fell 5.2% to £1.43bn. The gross margin rate improved by approximately 75 basis points.
Online sales now account for 5% of total sales which Loft said was “reasonably high” for the DIY sector.
He added that that number will rise. “Our view is that it will definitely grow and it’s growing at the moment. Where it will end up is hard to say,” he said.
Loft said Homebase will introduce next day and named day delivery as part of its multichannel growth plans.
While B&Q and Wickes, which operate giant sheds, are both aiming to reduce their footprint by carving up stores, Loft said Homebase does not face the same issue as its rivals. “Our stores are half the size or less than a B&Q,” he said.
However, Homebase is aiming to close about 40 stores and has 70 leases coming up for renewal which will give the retailer opportunity to negotiate a reduced rent.
“On a small number we’ve seen a halving of rent,” he said.
Loft added that the roll out of Habitat concessions and products in store is “going well”. “We’re experimenting with different formats. We’re very happy with the customer reaction,” he said.
He added that Homebase’s female bias gave it an advantageous point of difference. “We’ve always been favoured by female customers, and if anything we’ve pushed that on [with the new format stores]. It’s the most differentiating point for the business in the medium term.”
Homebase will roll out its new store format, which include Habitat concessions, after Home Retail bought the brand out of administration in 2011, to 100 stores. “We spend £800m and get a 20% sales uplift,” said Loft.