Homebase looks to be heading for administration, with the garden chain appointing insolvency experts which could mean jobs and 130 shops are at risk.
The troubled chain is preparing to line up Teneo to handle an insolvency process, after it announced a loss of £84.2 million last year.
Hilco Capital, which bought the retailer for £1 in 2018, looked at cost-saving measures earlier this year which it blamed on customers being more cautious in their spending habits.
If the beloved DIY chain collapses, it will be yet another major blow to British high streets, after the downfalls of The Body Shop and Wilko.
In August, Sainsbury’s agreed to acquire all 10 Homebase stores and convert them into supermarkets in a deal which is anticipated to create around 1,000 new jobs.
The locations set for conversion are located in Sutton Coldfield, Bromsgrove, Cromer, Derry/Londonderry, Fareham, Inverurie, Lowestoft, Newark, Omagh and Rugby.
Damian McGloughlin, the managing director of Homebase, told suppliers in August it would begin an ‘active sale process’ to seek new investment.
The chain is reported to be in talks with The Range and B&M but no sales came.
According to Sky News, The Range is considering buying 75 stores as part of a process where a business sells its assets before administration, in a move which could save 1,500 jobs.
Simon Roberts, chief executive officer of Sainsbury’s said: ‘Sainsbury’s food business continues to go from strength to strength as we push ahead with our Next Level Sainsbury’s plan.
‘We have the best combination of value and quality in the market and that’s winning us customers from all our key competitors and driving consistent growth in volume market share.
‘We want to build on this momentum which is why we are growing our supermarket footprint.
‘Our ambition is to be customers’ first choice for food and these new stores will showcase some of the best that Sainsbury’s supermarkets have to offer to even more communities around the country.’
This move follows reports that Homebase’s owner, Hilco Capital, is preparing to sell the company after being approached by The Range.
Hilco Capital purchased Homebase from Wesfarmers in 2018 for £1. It has closed Homebase has closed 106 stores since it was taken over by the company.
Homebase currently operates around 144 locations across the UK, with its first store opening in Croydon in April 1981.