WES Wesfarmers Limited

By Maryam Cockar

Homebase said Tuesday that it will close 42 stores, putting up to 1,500 jobs at risk, as part of a rescue deal with its creditors.

The home-improvement retailer said it will seek approval from its creditors to launch a company voluntary arrangement to shore up its finances. The company voluntary arrangement, a type of insolvency that allows a company to close underperforming stores and renegotiate rents with landlords, will be voted on by creditors on Aug. 31.

Homebase said its sales performance and profitability declined significantly under the previous ownership during the last two years. Hilco bought Homebase for one pound ($1.27) in May from Australia's Wesfarmers Ltd. (WES.AU) who bought the retailer for 340 million pounds ($433.7 million) in 2016.

The 42 stores are expected to close during late 2018 and early 2019, resulting up to 1,500 jobs cuts. Homebase said it will aim to redeploy staff where possible.

Write to Maryam Cockar at maryam.cockar@dowjones.com

(END) Dow Jones Newswires

August 14, 2018 08:38 ET (12:38 GMT)

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