A group of landlords is weighing up legal action over DIY retailer Homebase’s CVA plans, which will be voted on by creditors this Friday.
The threat of a dispute means the future of Homebase is hanging in the balance, The Sunday Times reported.
Homebase wants creditors to give the green light to proposals to shut 42 branches and slash rent of another 70 by between 25% and 90%.
The retailer, which was plunged into crisis by former owner Wesfarmers, which bungled its own £340m acquisition of Homebase from Home Retail Group in 2016, hopes to embark on a turnaround under new owner Hilco, which bought it for £1 earlier this year.
Hilco is willing to invest in reviving Homebases’s fortunes if the CVA is approved.
The retailer would bring back ranges axed under Wesfarmers’ ownership, and reintroduce concessions such as Habitat.
Earlier this month Homebase chief executive Damian McGloughlin said a CVA was vital in order to put the business back on track.
He argued: “The reality is we need to continue to take decisive action to address the underperformance of the business and deal with the burden of our cost base, as well as to protect thousands of jobs.
“The CVA is therefore an essential measure for the business to take and will enable us to refocus our operations and rebuild our offer for the years ahead.”
Retailer CVAs, particularly that of House of Fraser, have proved controversial among landlords. A group of landlords launched legal action on House of Fraser’s proposals, although a deal was eventually struck out of court.
Property trade body the BPF said when Homebase revealed its plans that the retailer, unlike House of Fraser, had “demonstrated best practice” in how it had approached its CVA.