Homebase has announced plans to close 42 stores by early 2019 resulting in 1,500 job losses.
The amount of store closures is less than feared last week, however, the DIY retailer will ask for rent cuts for 90 percent on a further 18 more stores.
“Launching a CVA has been a difficult decision and one that we have not taken lightly,” said Damian McGloughlin, the chief executive of Homebase.
“Homebase has been one of the most recognisable retail brands for almost 40 years, but the reality is we need to continue to take decisive action to address the underperformance of the business and deal with the burden of our cost base, as well as to protect thousands of jobs.”
“The CVA is therefore an essential measure for the business to take and will enable us to refocus our operations and rebuild our offer for the years ahead,” he added.
Hilco, the company that Homebase for £1 earlier this year, confirmed plans to carry out a Company Voluntary Arrangement (CVA).
The CVA will require the vote of the landlords, which will take place on August 31.
Homebase has already closed 17 stores this year and a total of 303 jobs have been cut at the head office in Milton Keynes.
CVAs have been carried out by a number of retailers this year including Carpetright (LON: CPR) and Mothercare (LON: MTC).
“These situations are never easy, as property owners need to take into consideration the impact on their investors, including those protecting pensioners’ savings, as they vote on the CVA proposal,” said Stephanie Pollitt from the British Property Federation (BPF).
“Ultimately, it will be for individual property owners to decide how they will vote on the CVA, but the proposal has sought to find a solution that provides a sustainable future for Homebase,” she added.