London : Home Retail, the country's biggest household goods retailer, said that it had signed to buy 27 leasehold properties from Focus DIY for 40 million pounds in cash, which will be fitted out under the Homebase brand.
The stores will be refitted with Homebase shopfronts after they are transferred to the Home Retail Group at the end of this year, bringing to 330 the number of Homebase stores. It paid £40 million in cash.
HRG hopes that the shops will be refitted in time for the peak spring period. The move will involve a capital investment of around 30 million pounds and calculates that it will incur transitional operating costs of about £15 million, Home Retail said in a statement.
The acquisition will raise the total number of Homebase stores to about 330. In all, Focus has sold 41 stores for a total of £68 million. Travis Perkins bought seven stores to add to its Wickes home improvement chain, and the others are thought to have gone to supermarkets.
Cerberus brought in Bill Grimsey and Bill Hoskins, who led the rescue of Wickes in the mid-1990s, as chief executive and finance director, respectively, when it bought Focus this year.
The company still plans to sell the balance of 39 stores, reducing its portfolio to 176. It hopes to open eight new stores next year.
Cerberus paid Apax Partners and Duke Street Capital, the private equity firms, only £1 for their shares in June. Cerberus took on the group’s £180 million debt and repaid bondholders 40p in the pound, valuing the company at £225 million.