Homebase’s creditors have approved the struggling DIY retailer’s rescue deal that will see 42 stores close and rents slashed on the remaining sites.
Owner Hilco Capital wanted the people it owes money to – usually landlords, suppliers and the taxman – to agree to the company voluntary agreement (CVA) as it believed it would help to turn the business around and restore profitability.
READ: Homebase to shut 42 stores, with restructuring group Hilco expected to confirm CVA plans
Some landlords had reportedly been planning to vote against the CVA, claiming it treated them too unfairly. Had that been the case, Homebase said it would “very likely” have been forced into administration.
Private equity firm Hilco, which bought Homebase for £1 in June from Australian firm Wesfarmers, can now to implement a three-year turnaround plan to revive the ailing chain.
Wesfarmers bought Homebase in 2016 for £340mln and planned to rebrand the chain with its Bunnings brand.
However, the Australian company struggled to turn the business around and admitted to making a number of "self-induced" blunders.
Homebase, which has about 250 stores and 11,500 staff, plans to bring back popular brands and concessions such as Laura Ashley and Habitat, BBC News said.
READ: CVAs explained: What is a company voluntary arrangement?
Hilco has revived the fortunes of other retailers and is best known for rescuing music chain HMV from administration in 2013, although it also tried to rescue department stores firm Allders and Allied Carpets, both of which later went into administration.
There has been growing anger among landlords about CVAs, which have been used to rescue struggling retail businesses such as in recent months, including Carpetright PLC (LON:CPR), Mothercare (LON:MTC) and New Look.
--Updates for result of vote--