The after-effects of Wesfarmers ending its Bunnings UK foray will likely be felt for some time following its decision last week to divest its UK-based Homebase business to a company associated with private equity outfit Hilco Capital.
However, for all the speculation in the lead up to the decision and Wesfarmers’ much-documented difficulties in cracking the UK retail sector with the Bunnings brand, the decision to sell Homebase for a nominal sum of £1 (around $1.77) was, at least at face value, an eye-catcher.
Certainly, it’s a sum that wouldn’t go too far on a lunch break at your local cafe. Good luck buying a coffee to fuel yourself through the afternoon hours, let alone something nutritious to put in your stomach.
In fact, come the end of the day, a bus fare home might pose a problem. You might well be exercising your legs more than intended with those sorts of funds in your pocket.
As reported by the BBC, the £1 price tag is a reflection of the company’s negligible value. But it’s far from the first time a struggling business has been offloaded at a bargain basement price.
The BBC reports the BHS department store chain, courier firm City Link and the UK division of Reader’s Digest, along with the Swansea City and Chelsea football clubs, are among the organisations to have been sold for £1.
The future trajectory of the Homebase business will, of course, be a matter of great interest for industry watchers, with Wesfarmers having advised that the divestment is expected to be completed by June 30. Closer to home, Wesfarmers expects to book a loss of up to $406 million from the sale.
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Martin Kovacs is a journalist with experience covering the IT, consumer electronics, retail, finance and energy sectors.
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