Bunnings UK could be for sale as Wesfarmers faces up to two disappointing years
Tuesday, April 3, 2018/
Bunnings’ journey to the United Kingdom could come to a swift end, with owner Wesfarmers reportedly considering selling the operation just two years after it purchased the UK DIY chain Homebase for $705 million.
Fairfax reported over the weekend that after troubling performance figures from Bunnings sites across the UK, owner Wesfarmers has engaged investment bank Lazard’s to consult on the chain’s future. There are rumours that possible solutions may include finding a buyer for the network, or even investigating a voluntary company arrangement for the UK and Ireland operations.
Wesfarmers is set to notify investors about the future of the global hardware chain expansion in June. In 2016, the company said it was optimistic about the prospect of taking the Bunnings brand, which was on the verge of crushing competitor Masters into collapse, to an overseas market for the first time.
However, in the months since its official launch last year, Wesfarmers have reported significant losses for the chain’s overseas operations, with management saying the process of converting Homebase stores to Bunnings branded entities was more complex and expensive than expected.
In February, Wesfarmers confirmed it was writing down $1 billion in costs associated with running the business overseas.
At the time, chief executive Rob Scott said the company would report back on the future of the project during Wesfarmers’ strategy briefing days in June.
However, those in the DIY space in the UK have told Fairfax there will be a buyer willing to take on the Bunnings chain in the region.
The company reportedly has $1.8 billion worth of retail leases across the UK and Ireland, which may have to be exited if Wesfarmers decides to close the overseas stores.