The UK arm of the Australian garden centre chain Bunnings recorded a loss of £54m for last year, marking a difficult first 12 months in charge of former Argos stablemate Homebase.
Bunnings bought the British DIY retailer in January 2016 for £340m, in the first stage of a £1.4bn sale of Homebase's then parent company Home Retail Group.
The remainder of the Home Retail business, including the catalogue retailer Argos, was acquired by Sainsbury's – the supermarket group that originally established Homebase in 1979.
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Bunnings has so far rebranded four of its 265 UK stores and has been undertaking a broader "repositioning" across all outlets, including investing in a wider product range and cutting prices, says The Times.
These efforts contributed to "transition and restructuring" costs of £19m.
The company says its changes also hit trading more generally, contributing to the deeper losses. The decision to axe its installation and in-home services, for example, hit sales of kitchen and bathroom products.
Bunnings also stopped selling soft furnishings and indoor furniture. The sales increase in other home improvement and garden categories was not enough to offset these losses.
But bosses claim there are "early indications" that the rebranded Bunnings format is "resonating well with customers". Their plan remains to switch over another 20 stores by the end of this year.
Within three years the company plans to have rebranded every Homebase store in the UK.
Writing in The Guardian, Nils Pratley says the results highlight why many analysts questioned the store's decision to buy Homebase, which "nobody had been able to make decent money from... in years".
A glance at rival B&Q's results, also published yesterday, "won't raise spirits either", he says.
B&Q registered a 7.8 per cent decline in like-for-like sales last year, which it blamed on the wet weather in July but which may also point to tough trading in the sector and on the high street generally.
