Homebase value could be cut by £600 million;
20 October 2008 09:36
It has been reported that approximately £600 million could be written off the value of Homebase this week, thanks to the current bleak retailing climate.; Home Retail Group currently puts a book value of just under £1 billion on the Homebase business, but this could be cut to between £300 and £400 million, according to the Sunday Telegraph.;Home Retail said in a September trading update it expected "substantial writedowns" at Homebase, which it bought in 2002 for £900 million, due to the struggling DIY market.;The company saw heavy sales falls for Homebase in the second quarter of its trading year between June and August - down 8.3% on a like-for-like basis. Argos was less affected with a 5.8% fall.;Homebase is the UK's second largest home improvement retailer with more than 330 large out-of-town stores, selling over 30,000 products to around 70 million customers a year.;The group is widely expected to make the write-down announcement on Wednesday as it unveils a 19% fall in first-half profits to around £121 million.;A tough year for Home Retail has already seen it relegated from the FTSE 100 Index in June. Its shares have been hit as the credit crunch, inflation and falling house prices combine to tighten consumer belts.;Home Retail Group has not commented on the story.
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