Homebase is zeroing in on the£25 billion home furnishings market, with plans to introduce mezzanine floors to most stores and add an own-brand range.
Managing director Paul Loft told HSBC's conference on home and furnishings retail that he aims to install mezzanine floors in 200 of the 275 Homebase stores.
Loft said there is potential to 'add 2 million net sq ft of trading space, free of rent'. The mezzanines cost£1 million apiece and pay for themselves within a year.
The DIY and home furnishings retailer already has 36 stores with mezzanines, and will add up to 40 more this year. Loft said the strategy was 'fantastically financially successful'.
The floors, measuring between 7,000 sq ft and 17,000 sq ft (650 sq m and 1,580 sq m), have produced sales uplifts of approximately 15 per cent.
Homebase uses the mezzanines to showcase kitchen, bathroom and home furnishing ranges that appeal to its strong female and ABC1 customer following. The retailer will test an own-brand soft furnishings offer this autumn. Loft said the 'stylish' range would make its debut in a 10-store trial.
HSBC analysts believe the combined clout of GUS-owned Homebase and sister chain Argos will make it a clear winner in the race for home furnishings market share, and capable of tripling its£1.1 billion sales. '(GUS) has the opportunity to build a£3 billion furnishings business over five years, which will add nearly 4 per cent of incremental profits growth annually,' according to the broker.
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