The Homebase in Dundee’s Kingsway West is set to close, it has been revealed.
The firm is pressing ahead with a wave of store closures that will see 42 DIY outlets shut, putting around 1,500 jobs at risk.
The retailer is closing the stores via a Company Voluntary Agreement (CVA), a controversial insolvency procedure used by struggling firms to shut under-performing shops.
Restructuring experts at Alvarez & Marsal will carry out the CVA, which will require the support of landlords.
Of the 42 set for closure four are in Scotland, with Dundee, Aberdeen, Inverness and Stirling set to shut.
There is no suggestion that the store in Glenrothes, Fife, will close.
A statement from Homebase said that sales performance and profitability declined significantly under the previous ownership over the last two years.
In addition, the company says it has faced an extremely challenging retail trading environment reflecting weak consumer confidence and reduced consumer spending.
The statement said: “After a comprehensive review, Homebase has concluded that its current store portfolio mix is no longer viable. Rental costs associated with stores are unsustainable and many stores are loss making.
“The CVA enables Homebase to make essential changes to its store portfolio, reducing its cost base and providing a stable platform on which to continue its turnaround.
“Under the terms of the CVA proposal, all creditors receive a better outcome than any other likely alternative.
“It is anticipated that 42 stores will close during late 2018 and early 2019.
“The proposed changes to the store portfolio will regrettably mean redundancies from those stores earmarked for closure.
“The process is expected to lead to a reduction of up to 1,500 roles, although every effort will be made to redeploy team members within the business where possible.
“All stores in the UK and the Republic of Ireland will remain open for business as usual and this process will have no impact on customer purchases, outstanding orders or any product or service guarantees.
“The creditors will vote on the CVA on 31 August 2018.”
Damian McGloughlin, CEO of Homebase, said: “Launching a CVA has been a difficult decision and one that we have not taken lightly.
“Homebase has been one of the most recognisable retail brands for almost 40 years, but the reality is we need to continue to take decisive action to address the underperformance of the business and deal with the burden of our cost base, as well as to protect thousands of jobs.
“The CVA is therefore an essential measure for the business to take and will enable us to refocus our operations and rebuild our offer for the years ahead.”
Stephanie Pollitt, assistant director of real estate policy, British Property Federation (BPF), said: “These situations are never easy as property owners need to take into consideration the impact on their investors, including those protecting their investors’ pensioners’ savings, as they vote on the CVA proposal.
“Homebase and Alvarez & Marsal have, however, demonstrated best practice, engaging with the BPF in the process and therefore ensuring property owners’ interests have been properly taken into account.
“Ultimately, it will be for individual property owners to decide how they will vote on the CVA, but the proposal has sought to find a solution that provides a sustainable future for Homebase.”
The latest restructuring would come on top of a store closure programme the retailer has been carrying out since February.
A total of 16 Homebase stores have been shut this year and the business has also axed 303 jobs at its head office in Milton Keynes.
Homebase could see some resistance from landlords to the CVA, with the property industry expressing disdain for the procedure, saying it leaves them out-of-pocket.
CVAs have been adopted by a host of retailers including New Look, Carpetright and Mothercare.
The Homebase store closures follow the sale of the business earlier this year by its former Australian owner Wesfarmers to Hilco, a retail turnaround specialist, for £1.
Homebase was bought by Wesfarmers for £340 million in 2016.
Wesfarmers is known for its Bunnings chain in Australia, and attempted to import the home improvement brand to the UK by converting a host of Homebase stores into the Bunnings format.
However, the strategy ended in disaster.
Prior to the Hilco takeover, Homebase had 250 stores at its peak and 12,000 staff.