• Wesfarmers to plough £500m into taking on the UK DIY sector 
  • Bunnings lifer Peter Davis to lead retailer in UK & Ireland
  • Wesfarmers said  “significant potential” to expand store footprint under Bunnings fascia
  • Australian retailer promises “lowest prices”

Australian retailer Wesfarmers will invest £500m into its UK and Ireland operation after it buys Homebase and has named who will head it up.

Wesfarmers, which agreed a £340m deal this week to acquire the Home Retail-owned chain, said the £500m will be used for capital expenditure and working capital investment, but no further detail was given. 

Stores will be rebranded to Bunnings within three to five years.

Wesfarmers said there is “significant potential” to expand the store footprint under the Bunnings fascia. This is despite Homebase announcing plans last year to close a quarter of its stores.

Peter Davis, a Bunnings lifer and its current chief operating officer, will take the role of managing director at Bunnings’ UK and Ireland division.

Rodney Boys, Bunnings’ logistics and improvement general manager, will take the role of finance director.

Homebase’s current boss and former Tesco exec Echo Lu, who joined the business last April, is expected to help with the initial integration but her long-term future remains unclear.  

It is understood that Wesfarmers’ management think Lu has made a “good impact”.

In an investor presentation, Wesfarmers revealed that in the first 12 months of ownership it will develop pilots for Bunnings’ stores, as it seeks to take on the likes of B&Q and Wickes in the UK’s DIY retail market.

Once opened, Wesfarmers is promising “lowest prices” and “hours to suit all customers”.

Bunnings is Australia’s largest hardware chain, with a total of 338 stores including a presence in New Zealand.

Meanwhile Sainsbury’s is seeking to acquire the rest of the Home Retail Group, including Argos, and is expected to return with an improved offer after having an initial approach rejected in November.