Bunnings defends UK expansion

John Gillam insists Homebase is a strong long-term growth story, despite his criticisms of the group.

Bunnings insisted the Homebase platform presented a strong long-term growth story.

Bunnings Warehouse chief executive John Gillam has defended the group’s UK expansion, telling a network of executives there have been no surprises since its $705 million purchase of Homebase earlier this year.

The head of the Wesfarmers-owned home improvement giant was critical of the company it acquired, noting “out of stock” events were among the worst it had seen globally, but insisted the Homebase platform presented a strong long-term growth story.

“We are not particularly enamoured with the way it goes to market and … it’s not a particularly well positioned business,” Mr Gillam told delegates at an Australian British Chamber of Commerce lunch in Melbourne.

“But we don’t think we have paid too much for a poorly positioned business.”

Wesfarmers is planning a steady rollout of the Bunnings Warehouse brand in the UK and Ireland as it perfects its strategy, with Mr Gillam noting plans to open four to six rebranded outlets by June 30 were “on track”.

However, he again cautioned investors not to expect swift results, suggesting to look to the Bunnings growth story in Australia as it built steadily through the mid-1990s.

“We’re not going to be too shaken off our path if we are boring people across the next couple of years because we haven’t got any flash results to show,” he said.

“We are generally pretty long-run, long-term focused operators.”