BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Sainsbury's Chief Executive, Sir Peter Davis
"We need to renew our depot infrastructure"
 real 28k

Friday, 22 December, 2000, 12:31 GMT
Sainsbury's sells Homebase
A Homebase store
Jobs will be safe, says Sainsbury's
Supermarket chain Sainsbury's has sold its Homebase DIY chain in a two-fold deal worth 969m.

The arrangement will see its chain of stores sold to venture capitalist Schroder Ventures for 750m.

A further 28 sites, which were intended to house new Homebase stores, are being sold to Kingfisher, owner of DIY rival B&Q, for 219m.

Sainsbury's chief executive Sir Peter Davis told the BBC he hoped that the change in ownership for Homebase would not lead to job losses.

Expansion plans

Sir Peter put Homebase up for sale in August, saying the group needed to be set free to pursue expansion plans which included moves into continental Europe.

But the food retailer decided not to fund the DIY division's expansion and chose instead to concentrate on revamping its food stores.

Sir Peter, who joined Sainsbury's in March, wants to arrest the decline in food market share which it is losing to rivals such as Tesco.

He has a three-year recovery plan and aims to revamp up to 150 stores next year but also needs to find the cash to speed the process.

High price

Completion of the sale is expected to take place in the first quarter of next year, subject to clearance by the European Commission.

Homebase has 283 stores around the country and employs 17,000 people.

Schroders partner Charles Sherwood said the group was looking to expand the business, focusing on developing larger format stores more than twice the current average store size.

Schroders will need to bring in a chief executive to replace Kate Swann, who is moving to catalogue retailer Argos.

To plug the gap, it has appointed John Lovering, a retail specialist who chairs a number of companies, including retailer Peacocks, as chairman and interim chief executive.

Sainsbury's sale of Homebase has taken longer than expected, with the suggestion that an initial 1.2bn price tag had dissuaded suitors.

The widely expected announcement of the deal had little impact on Sainsbury's shares, which slipped 5p to 400p in early trading.

Homebase has struggled to keep up with market leader Kingfisher's B&Q.


In the UK, Homebase has been pushed into third position by the recent combination of Focus Do It All, Wickes and Great Mills - now owned by private equity group Duke Street Capital.

Focus Do It All has about 16% of the market while Homebase has 13%.

Homebase made an operating profit of 65m last year and is expected to make upwards of 70m in the current year.

It enjoyed like-for-like sales growth of 12.3% in the first quarter.

Search BBC News Online

Advanced search options
Launch console
See also:

23 Aug 00 | Business
Sainsbury's in Homebase talks
31 May 00 | Business
Sainsbury's profits slump
06 Dec 00 | Business
Do-it-All sees room for improvement
01 Sep 00 | Business
Do It All at Wickes
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories