Wesfarmers revamps UK hardware chain by ditching Laura Ashley

Wesfarmers has pushed ahead with the restructure of its newly acquired British hardware chain Homebase.

Wesfarmers plans to turn its purchase of hardware chain Homebase into the “Bunnings” of Britain.

Wesfarmers has pushed ahead with the restructure of its newly acquired British hardware chain Homebase by kicking out 22 concessions operated by homewares and fashion group Laura Ashley, to closer match the successful operating model forged by its local hardware juggernaut Bunnings.

Laura Ashley, listed on the London Stock Exchange, revealed to its investors that it would remove its concession stores found within Homebase by the second quarter of next year, following the acquisition of Homebase by Wesfarmers earlier this year for $704 million.

“The company does not expect there to be a material impact on the group,” Laura Ashley said.

Laura Ashley, a British fashion and textiles group founded in the 1950s, sold a number of lines from its Homebase concessions, such as paints, wallpaper, home furnishings and other housewares.

But its days in 22 Homebase stores around Britain were numbered from the moment Wesfarmers swooped in to buy the struggling hardware chain, with its new operator Bunnings signalling it would clear out all concession stores from the retailer as part of its transformation into the “Bunnings of the UK”.

In January, Laura Ashley’s Australian business was placed in administration, with the local and New Zealand businesses run under a licence agreement with Laura Ashley UK.

At the Wesfarmers investor day in mid-June, Bunnings chief executive John Gillam confirmed the removal of all concessions from Homebase stores was proceeding to plan.

Meanwhile, the first Bunnings pilot stores are set to be unveiled, with Wesfarmers telling investors their success was a precursor to further investment in the British hardware operations.

Wesfarmers plans to spend another $1 billion transforming it into a Bunnings UK retail chain.

The success to date of Wesfarmers’ entry into the £38bn British hardware market will be revealed tomorrow when Wesfarmers releases its first-quarter trading performance, which will include the sales results for Homebase.

At the June investor day, Mr Gillam said in the four months since the completion of the Homebase takeover, the thinking behind the acquisition had been validated and that it had pulled together an advisory board to spearhead its plans.

The three initial board members are Archie Norman, a retail veteran who’s been a sounding board for Wesfarmers since its $20bn purchase of Coles 10 years ago, senior Lazard adviser Michael Mire and Matt Tyson, who spent two decades at hardware operator Kingfisher.