The collapse of Homebase has left suppliers and other unsecured creditors facing losses of more than £650 million, with little hope of recovering their money, according to newly released documents.
A report filed with Companies House by administrators Teneo reveals that when Homebase entered administration in November, it owed £657 million to unsecured creditors. Among those affected are major suppliers, including AO World, Halfords, and The Hut Group. Approximately £100 million of this debt is owed to trade creditors, businesses that supplied Homebase with goods and services.
Some of the most significant supplier debts include £2.9 million owed to Close Brothers for till systems, £1.7 million to logistics provider XPO, and £750,000 to AO World for kitchen appliances. Given the unsecured nature of these debts, suppliers are unlikely to recoup their losses.
Retail analyst Jonathan De Mello highlighted the scale of Homebase’s financial mismanagement, stating: “The huge level of debt Homebase accrued over the years is an all too familiar story, with various creditors left out of pocket”. He also warned that suppliers should conduct stricter due diligence when extending credit to struggling retailers.
Mark Pilkington, another retail analyst, emphasized the broader issue: “Yet another venture capital-owned retailer collapses, leaving suppliers high and dry. The level of debt is very high, and I am sure there will be questions about when the owners knew the business was in serious trouble.”
Adding to the complexity, Homebase owed £524 million to Ark Finco, a company linked to Hilco, its former owner. Teneo is currently assessing the security status of this intra-group debt.
Homebase ultimately collapsed after its bank, Wells Fargo, refused to extend a £95 million lending facility, citing concerns over the retailer’s future trading prospects. For suppliers, this marks yet another stark reminder of the risks associated with retail partnerships amid financial instability.
Source: The Times