Bunnings steps up plans to re-shape Homebase portfolio

The DIY chain’s owners Wesfarmers acquired Homebase from Home Retail Group last year and is in the process of converting the stores into its Bunnings Warehouse format.

But it is understood the Australian retailer is also eyeing potential disposals and acquisitions as it ramps up its assault on the British market.

Sources close to the situation said Bunnings had instructed property consultants Wilkinson Williams and CWM Out of Town to help it review the estate it inherited from Homebase.

Speaking after Wesfarmers posted a pre-tax loss of £28m in the UK during its maiden half-year on these shores, the boss of Bunnings’ British operations PJ Davis told Retail Week: “We’re always looking at our network plans.

“As we’ve always said, we’ll see a combination of new openings and replacement stores and obviously when we’re replacing stores we’ll close old ones.

“The network development plans are dynamic and we want the right stores in the right locations for our customers long term.”

Opportunities

Davis insisted Bunnings had “not made any decisions” around potential closures or new stores as yet, but said there were “a large number” of locations in the UK where Homebase Bunnings was not currently present.

He added that the business was “evaluating a large number of property opportunities”, which could include rolling out smaller format shops in the future.

Davis said he was “very interested to see” rival B&Q’s 3,000 sq ft high street store, which is due to open on London’s Holloway Road next month.

Ikea is also piloting smaller formats in locations such as Westfield Stratford, as traditional big box retailers continue a shift into smaller, more accessible locations.

“We’ve already got smaller stores in Australia and New Zealand. Everyone talks about the 200,000 sq ft warehouses but we do have some that are 20-30,000 sq ft, including one in a city centre,” Davis added.

“We’re happy to take our format into a large number of new markets where the opportunities exist.

“I think in the UK and Ireland that’s a fair way down the track. It’s not a priority for us.

“I think it’s a positive thing for the industry that B&Q are trying these strategies and tactics, but at the moment we’re focused on getting the Bunnings pilots right and rolling them out in the UK and Ireland and, to be frank, that’s a big enough job at the moment.”

Wilkinson Williams and CWM Out of Town both declined to comment.