Homebase will close 42 stores in a move that will save the retail chain from bankruptcy.
Creditors approved proposals the company voluntary arrangement (CVA), that will cut 1,500 jobs and lead to the closure of closure of 42 out of 241 branches.
“We now have the platform to turn the business around and return to profitability,” said Damian McGloughlin, the group’s chief executive.
“We can look to the future with great confidence, and we will be working closely with our suppliers to capitalise on the opportunities we see in the home improvement market in the UK and Ireland.”
Over 95 per cent of Homebase’s landlords voted in favour of the CVA. Landlords of an additional 70 stores agreed to accept rent cuts of up to 90 percent.
Following the Australian firm Wesfarmers (ASX: WES) takeover of the group, a move that was branded, one of the worst acquisitions in UK corporate history, the group was sold on to Hilco, which bought Homebase for £1 in May.
Wesfarmers boss Rob Scott described the acquisition as “disappointing”.
“Problems arising from poor execution post-acquisition being compounded by a deterioration in the macro environment and retail sector in the UK,” he said.
Hilco plans to take the loss-making chain “back to its roots”.
CVA’s are becoming more and more commonplace this past year, with several chains on the high street seeking approval for similar measures.
Groups include Mothercare (LON: MTC), Carpetright (LON: CPR), House of Fraser and Byron.
Earlier this week, Jamie Oliver revealed that he injected £13 million of his own money into restaurant chain in order to save it from collapse.