First retail ‘name’ to pop off 2018

[jas xjr]

eltawater said:

The conversion to Bunnings for the remaining store estate is now on hold pending a review which is to be expected to be complete by June. They've not ruled out cutting their losses completely in the UK and shutting down.

Wesfarmers managing director has admitted that the issues they're facing are self-induced, namely:

• Clearing out the existing management structure and replacing it with one which didn't understand the UK market.

• Abandoning big ticket Kitchens and Bathroom ranges

• Underestimating the demand in the UK market for heaters, cleaning and storage during the winter.

They abandoned the existing ecommerce website functionality as they were trying to transfer their existing Australian model of "you must come into store to buy and order anything for delivery using these bits of paper". I see some semblance of ecommerce has returned to the Homebase website but it wouldn't surprise me if they've been hurt by the loss of sales to other UK sheds with a decent online presence and Amazon.

Disappointing to see as Homebase has a lot of good people

i have a homebase quite near to me. i always struggled to find basic plumbing fittings in that store. they seemed to be concentrating on home furnishings etc.
things have improved lately but with most kinds of shopping you tend to fall into certain habits. mine has been to go to screwfix for emergency supplies or if they are open , a plumbers merchants.
screwfix have been opening stores , at least two in the last few months , close to me.

[Fastchas]

Someone must have mentioned Hobbycraft by now?
How that place continues to keep it's doors open is beyond me.

[craigjm]

Fastchas said:

Someone must have mentioned Hobbycraft by now?
How that place continues to keep it's doors open is beyond me.

Backed heavily by Bridgepoint equity management

[jjlynn27]

Fastchas said:

Someone must have mentioned Hobbycraft by now?
How that place continues to keep it's doors open is beyond me.

I'll second that, one close to Halfords near me, is always completely deserted. Regardless of the time of the day, it's always seem as there is more staff than customers and never, ever anyone at the tills.

[Gareth79]

jas xjr said:

i have a homebase quite near to me. i always struggled to find basic plumbing fittings in that store. they seemed to be concentrating on home furnishings etc.
things have improved lately but with most kinds of shopping you tend to fall into certain habits. mine has been to go to screwfix for emergency supplies or if they are open , a plumbers merchants.
screwfix have been opening stores , at least two in the last few months , close to me.

While Screwfix have jacked their prices up in recent years (Toolstation is much cheaper for comparable products), it's still the case that you can buy a box of 200 of something for the price of 20 at B&Q/Wickes etc. (and in the case of B&Q, often for the identical product).

[Robertj21a]

jas xjr said:

i have a homebase quite near to me. i always struggled to find basic plumbing fittings in that store. they seemed to be concentrating on home furnishings etc.
things have improved lately but with most kinds of shopping you tend to fall into certain habits. mine has been to go to screwfix for emergency supplies or if they are open , a plumbers merchants.
screwfix have been opening stores , at least two in the last few months , close to me.

I visit a few Homebase stores from time to time. Not sure I've bought anything at all from any of them, before or after Bunnings. They've either been too expensive or a poor range/quality.

[EddieSteadyGo]

eltawater said:

In recent years Homebase profits have always been lucky to be in the high teens to early £20 millions on a turnover of £1.5bn, with a significant proportion attributable to big ticket sales such as kitchens and bathrooms which have now been abandoned.

There's not as much margin as you might think in daily DIY supplies when the market has so much choice amongst the big sheds, ebay and Amazon particularly for branded goods which are going to be the same everywhere. It's the same problem which afflicts Toys R Us, people can buy elsewhere cheaper and be reasonably assured it'll be the same thing in the box.

To be fair to Wesfarmers they didn't really have much choice over the loss of key brands and concessions within the Homebase stores (Argos click and collect, Habitat, Schneider etc) as those belonged to Home Retail Group and were not included in the sale to Wesfarmers. However, the conscious decision not to replace those with equivalent ranges is something which they've openly admitted has cost them dearly.

The thing that I don't understand is they reportedly paid over £300m for the business but didn't want to keep the brand name, any of the managerial team, nor a lot of the stock. Plus they didn't want to be in home furnishings.

So in effect what they actually purchased were the existing site leases (and the value which comes from many people knowing that previously Homebase operated from there).

And as you say the profits were not exactly on the chunky side considering the risks involved with dealing with a business £1.5bn in size.

I wonder what was the basis of the calculation they used to determine the purchase price...

[eltawater]

EddieSteadyGo said:

The thing that I don't understand is they reportedly paid over £300m for the business but didn't want to keep the brand name, any of the managerial team, nor a lot of the stock. Plus they didn't want to be in home furnishings.

So in effect what they actually purchased were the existing site leases (and the value which comes from many people knowing that previously Homebase operated from there).

And as you say the profits were not exactly on the chunky side considering the risks involved with dealing with a business £1.5bn in size.

I wonder what was the basis of the calculation they used to determine the purchase price...

Their idea was to replicate what they do well in the Australian market, which is to pile practical DIY basics high in store and to heavily push own brands. There was a genuine plan and intention to invest heavily into the UK business with ambitious plans for growth. Buying the UK business gave them a ready made network of stores in which to use as a launchpad for this. From an insider point of view that sounded really positive at the time but the key strategic direction to go back to basics and to drop the profitable features of the UK business appears to have been their undoing.

[Hub]

Gareth79 said:

While Screwfix have jacked their prices up in recent years (Toolstation is much cheaper for comparable products), it's still the case that you can buy a box of 200 of something for the price of 20 at B&Q/Wickes etc. (and in the case of B&Q, often for the identical product).

They operate trade counters out of warehouses on industrial estates, which I'm guessing is a lot cheaper than big retail premises on retail parks!

[Fastchas]

craigjm said:

Fastchas said:

Someone must have mentioned Hobbycraft by now?
How that place continues to keep it's doors open is beyond me.

Backed heavily by Bridgepoint equity management

They throw good money after bad?

[craigjm]

Fastchas said:

craigjm said:

Fastchas said:

Someone must have mentioned Hobbycraft by now?
How that place continues to keep it's doors open is beyond me.

Backed heavily by Bridgepoint equity management

They throw good money after bad?

Not all about that though with equity management. Generally those kind of organisations would never close an investment down. It’s all about the long game and they have been in profit.

[anonymous-user]

Fastchas said:

craigjm said:

Fastchas said:

Someone must have mentioned Hobbycraft by now?
How that place continues to keep it's doors open is beyond me.

Backed heavily by Bridgepoint equity management

They throw good money after bad?

What makes you think they are not financially successful?

[eltawater]

I'd say that hobbycraft have been very well positioned to take full advantage of the public interest in shows such as The Great British Bake Off and Sewing Bee in recent years. They're not cheap but they do stock a good range of products. It does have a bit of a costco spell in that I can walk in looking for some icing pens and walk out with some silver spray, some foam craft sheets and a large plastic storage box...

[bazza white]

Can i add Jamies italian, just restructured so may end up in the 2019 thread but its in a bit of a mess.

http://metro.co.uk/2018/02/12/jamie-olivers-italia...

[Jonesy23]

bazza white said:

Can i add Jamies italian, just restructured so may be the 2019 thread but its in a bitbof a mess.

http://metro.co.uk/2018/02/12/jamie-olivers-italia...

Bet the mockney is still sitting pretty, it'll be everyone else who ends up counting the cost.

[garagewidow]

perhaps people have realised it isn't difficult to knock up some pasta with tomato sauce and save money into the bargain.

[Eric Mc]

jjlynn27 said:

Fastchas said:

Someone must have mentioned Hobbycraft by now?
How that place continues to keep it's doors open is beyond me.

I'll second that, one close to Halfords near me, is always completely deserted. Regardless of the time of the day, it's always seem as there is more staff than customers and never, ever anyone at the tills.

Brand new one just opened in Farnborough. At the moment, it seems fairly busy. At least I have a local shop where I can get my Tamiya paints.

[langtounlad]

Hobbycraft products are sold at very healthy margins. Their sales are somewhat seasonal with a lot of the annual profit made in the Xmas season. The one local to me is always busy and my wife often is 'just popping into Hobbycraft' for some stuff related to her sewing, knitting etc hobbies. I'd be surprised if they were in trouble overall.

[HTP99]

langtounlad said:

Hobbycraft products are sold at very healthy margins. Their sales are somewhat seasonal with a lot of the annual profit made in the Xmas season. The one local to me is always busy and my wife often is 'just popping into Hobbycraft' for some stuff related to her sewing, knitting etc hobbies. I'd be surprised if they were in trouble overall.

Hobbycraft pretty much have the market to themselves and even though you'd be able to get everything that they sell, on the internet, I would say it is the type of product which needs to be seen and touched to make sure it is the correct item.

[drdino]

Warren Evans into administration...

https://www.theguardian.com/money/2018/feb/17/warr...

I'm affected by this, but I usually pay with cc when making a large purchase so should hopefully have s75 protection.