In This Issue
Glyphosate licence approved for 5 years
Durston's BUY BRITISH Campaign hailed a success
We cleared out Homebase management too quickly, confesses parent company's new CEO
November plant sales up 23% so far
Houseplants see a resurgence with younger generation
Santa Paws delivers memorable experiences for Pet Owners
Christmas product sales power ahead
Free Christmas tree collection service created to help future gardening projects
Over 60 new varieties in T&M new seed range for 2019
HTA briefs Westminster on industry's post-Brexit hopes and fears
Brookfields becomes a winter wonderland
Postive response to Glee at Spring Fair 2018
Party time for Newbank founder at 90
Tong lights up Christmas once again with award-winning displays
Dogs can meet Santa Paws at Squire’s
Maxicrop arrives in SBM Warehouse
Yorkshire nursery plays key role in boosting UK tree population
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Houghton Hall, Wilmslow and Livingston are Klondyke winners for 2017
Houseplants, lights and cuttings drive sales
Reindeer falls sick at Polhill grotto launch
Bird feeding gets all decorative
Former UK Ambassador to speak at 2018 GCA conference
Christmas records almost broken already
Stylish new Plantpak range launched in time for Christmas
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So what went on behind closed doors at the Wyevale suppliers meeting.?
Garden centres defend use of reindeer after animal rights protests
Is Christmas peaking too soon?
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We cleared out Homebase management too quickly, confesses parent company's new CEO
Analysts say sales have gone backwards by 20% since Bunnings acquisition

The new CEO of Bunnings and Homebase parent company Wesfarmers has confessed to shareholders that the company had made a mistake by changing the Homebase management team and product ranges too quickly when it took over the UK chain last year.

 

Bunnings' UK and Ireland (BUKI) has reported losses of Aus$89 million (£50 million) in 2017, compared to Homebase earnings of $52 (£29.7 million) in 2015, with sales falling 17.5% in the September quarter. Analysts estimate that sales have gone backwards by 20% since the Homebase acquisition.

 

Scott (pictured right) said he expected the losses to increase through 2018 as trading remained challenging for Homebase during the continuing conversion of stores to the Bunnings format.

 

However, sales in the most-recently converted stores were doing well and he was considering accelerating the conversion, although he wanted to see how the new-format stores traded during the “dark months” of the British winter before investing more capital.

 

 “Our focus is on strengthening the management team to support the transformation and instilling stronger execution across the business. The establishment of Bunnings in the UK will take time and we will be disciplined with how we invest further capital,” he said.

 

The the parent company has said it recognises the UK market will be a difficult nut to crack in the current financial climate.

 

Scott is resisting pressure from investors to spin off Bunnings, which generates 30% of group earnings but is estimated to be worth $23 billion (£13 billion), or almost half of Wesfarmers' $48 billion (£27.3 billion) market value

 

But he conceded that Bunnings' expansion into the UK and Ireland through the $700 million (£360 million) acquisition of Homebase in January 2016 had been disappointing, and a change in tack was needed to restore sales growth and profits.

 

"Clearly it's not performing as well as we would like," he said.

 

Scott warned that losses would increase this year as trading deteriorated at Homebase stores and costs were increasing.

 

While he believed the Bunnings format would eventually resonate with British customers, he confessed that Bunnings had erred by removing most of Homebase's existing management team and changing its offer, including the product range and prices, too quickly.

 

“We relied too heavily on the Bunnings team and we exited virtually all the local team," he said.

 

“In hindsight, the team probably moved too quickly to change Homebase and made a lot of changes to clean out a lot of the concessions and clean the stores up with a view towards converting to Bunnings,” Mr Scott said. “But unfortunately we didn't replace those concessions with product and offers that were compelling enough to get customers in the door."

 

Wesfarmers has strengthened the BUKI management team over the past few months, appointing former B&Q operations director Damian McGloughlin, as COO and former Officeworks chief operating officer David Haydon(left), who has also held senior roles at B&Q and Wickes,  as Homebase's managing director. There are also new merchants and regional managers.

 

 “It really resonates with customers, and community engagement is very strong, and that gives us confidence the Bunnings offer will resonate in the UK and will be profitable in the UK,” Scott said. “The challenge is that the faster we convert the stores, the more disruption we cause and the more challenging the short-term performance will be.”

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Steve Wain
Hardly a revelation is it? Always makes me smile when so called ‘experts’ come into the sector and think it’s easy. It isnt, it’s quirky, it’s niche and it’s particularly about people and experience. My local Homebase in York resembles a car boot sale at times. Aisles cluttered, stock uncared for and piled everywhere, hand written POS, untrained staff and racing prices to the bottom. Handing it on a plate to garden centres which in my opinion is a good thing.
Neil Newton
Absolutely spot on Steve.

If this Ashes tour doesn't turn our way we will all be 'boycotting' their stores anyway.....and their so called 'experts'......with upside down thinking!