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MARK FAITHFULL

Following

the Money

Mark Faithfull crunches the numbers as he looks at
analysis and expansion that reflects changing markets

HOmEBASE Up FOR SALE AFTER FUTURE OF WESTFIELd mALLS IN US UNcERTAIN
BUNNINgS dEBAcLE
he for-sale signs could start hanging over Westfield’s US shopping malls
he UK’s second-placed DIY retailer, Homebase, is after an escalating row over how best to navigate Unibail-Rodamco-
set for a fourth owner in just five years, as private T Westfield (URW) through the ongoing retail crisis culminated with rebel
T equity specialist Hilco seeks to cash-in on soaring shareholder group Refocus winning three places on the supervisory board and
home improvement sales during Covid-19. stopping a large capital raising plan.
The move to put the chain up for sale affirms the In the week before the decision, two US pension funds - The California Public
extraordinarily rapid turnaround of a DIY stalwart that was Employees’ Retirement System (CalPERS) and the State Board of Administration
taken to the brink of collapse by the calamitous acquisition of Florida (Florida SBA) - weighed in on the side of Refocus and declared that
by Australian conglomerate Wesfarmers. It sold the chain in they would vote against the proposed rights issue and divestments proposed by
2018 for £1 having spent £340M on it just two years earlier, the management team to increase the company’s financial headroom through a
and walked away having sunk an estimated £1bn into its rights issue as part of a plan it dubbed ‘Reset’. By contrast, the Refocus consortium
disastrous European misadventure. of European investors, which holds a combined five per cent, asserted that the
Announcing the proposed sale, Homebase Chief company’s existing liquidity and favourable access to the bond markets meant
Executive Damian McGloughlin said a transfer of ownership that the rights issue was “completely unnecessary and highly destructive” to
within two to three years of acquisition had “always been shareholders. It argued that URW should concentrate instead on its European
part of the plan” and that with Homebase’s performance shopping centre business by selling its US portfolio of Westfield malls.
restored “now was the right time”.
Hilco’s strong performance – it hopes to conclude a sale
by Easter – is in stark contrast to Wesfarmers, which took
over Homebase in 2016 as a fix-up opportunity of 265
well-located stores and a business. The management team,
seconded from Australia, moved too quickly and tore up
the original, cautious plan, initiating a wholesale clear-out of
local management and Homebase’s extensive concessions,
alienating core customers amid an increasingly challenging
retail trading environment.
A steep descent into losses led Wesfarmers to dump
the expat management and appoint B&Q’s Retail Director,
Damian McGloughlin, to head the business. Newly-
appointed Wesfarmers CEO Rob Scott then initiated
a strategic review and sold the business to Hilco, which
is now primed to talk to a number of interested parties,
including both existing retailers and “various sizes of
private equity houses”, while a stock market listing is also
an option, according to CFO Andrew Coleman, who said:
“We’ll have to see how things play out but all options are
on the table.”
BOOkSELLER pROmISES TO RIvAL AmAzON IN Uk

Independent bookshops in the UK backed the accelerated launch
of a new online retailer that plans to go toe-to-toe with Amazon,
I carrying a strong social-conscience message and a pledge to help
save Christmas for beleaguered booksellers.
Bookshop.org allows readers to buy books online while supporting their
local independent bookseller and it opened in the UK on 2 November.
More than 150 UK bookshops initially signed up to serve customers
through Bookshop.org, which launched in the US in January and has been
making headlines ever since after a hugely successful debut year, growing
rapidly in the face of the pandemic and raising a page-turning $7.5 million
for independent US bookshops.
The platform works as a marketplace for independent stores, ensuring
they receive the full profit margin – 30 per cent of the cover price -
from each sale. Books are offered to consumers at a small discount and
delivered within two to three days.
Bookshop Founder Andy Hunter had been planning to launch Bookshop
in the UK in 2021 or 2022. However, after the rapid success of the
platform in the US, shops, publishers and authors in the UK clamoured
for him to speed up that timeline.
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28 RETAIL & LEISURE INTERNATIONAL