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global eyes Bunnings actions e-commerce plan Since the last magazine, during one of Bunnings’ regular investor briefings, in March Bunnings Group MD, Michael Schneider, revealed more of the plans for a full e-commerce pilot for the Australian market. Starting with click & collect at a Melbourne store and a full e-commerce trial with its seven Tasmanian stores, the goal is for a broader online roll-out offering 60,000+ SKUs over the course of the next year and a half. The cost of fulfilment with bulkier items had been the main barrier so far, he said, although a year-old trial selling special online orders of about 20,000 bulky items has obviously changed Bunnings’ minds on that front. There is also the issue of staff time spent picking items for click & collect, which could however be mitigated by replacing hand-written signs and price tickets with digital tickets. Convenience is top of mind here: online purchasing “will help customers be more confident they’re not driving to a couple of Bunnings stores on a weekend to fill out the project,” he said. Adding to this e-commerce strategy is Bunnings’ stated goal to increase its only just double digit share of the Australian market for bathrooms, kitchens, window furnishings and floors and to take its share of trade from 35% to 50%. The timing of all this makes good sense, with Bunnings.com.au already the country’s fourth most visited website and as the Aussie housing market continues to cool and attention turns to upkeep and renovation. Indeed, some 70% of Australia’s 10 million existing homes are 20+ years-old and need maintenance, says Bunnings. www.bunnings.com.au Too early to rate the Homebase turnaround? MID LAST MONTH, coinciding with its first post-Wesfarmers full half year (six months to 30 December 2018), Homebase gave an in-depth update on progress around its turnaround, 10 months into its three-year plan. Homebase’s EBITDA loss for the half fell by nearly £140 million, having removed some £100 million of fixed costs. The other big news was an almost 22% improvement in Gross Profit (to £217 million), the result of big improvements in stock loss and “quality of stock”. Homebase’s top line however at £497.8 million is still 3.5% down on the previous equivalent period but it’s fair to say it’s still early days for the new regime.. Following the sale of Homebase to Hilco Capital in June 2018, seeking much- needed financial and operational stability, the business was restructured and an asset- based lending facility of up to £95 million was secured f to support working capital requirements. Fixed costs have fallen due to a much reduced head count at Head Office (as many as 300 staff have been laid off ), as well as other measures designed to fundamentally simplify the business. On top of this, the controversial Company Voluntary Arrangement (CVA) allowed the closure of 47 stores described as “significantly loss-making” and rent reductions on 70 others. Two out of six Distribution Centres were also closed. In terms of the last mile or so, Homebase has also appointed supply chain specialists Wincanton to run a fully-managed customer order delivery service from Homebase DCs. In terms of product mix, Homebase has brought back or at least boosted customer favourite categories that had been pegged back under the former owner. Kitchen and lighting are two key examples of this, while furniture and soft furnishings have been reinstated and in-store concessions have also returned (following Wesfarmers’ stripping out of Habitat and Laura Ashley), with the likes of Tapi, Silentnight and Ponden Home. Team member training has been another recent emphasis while the foundations to “rebuild” Homebase’s digital offer have also been laid, early results thus far showing a double digit increase in traffic to the Homebase website. The net result? Says the company: “Management are confident a solid foundation for future growth is now in place and the business is well placed as it enters the key Spring and Summer trading period.” Homebase CEO, Damian McGloughlin, says: “The benefits of the changes we have made are starting to come through and I am extremely grateful for the loyalty, energy and support we have received from our team members and suppliers. It is their hard work that has enabled us to put in place these stronger foundations.” Andy Coleman, CFO of Homebase, adds: “We are encouraged by the progress we are making on our turnaround plan and believe that we now have a stable platform in place to support future growth.” So, still too early to judge progress? Probably, despite positive moves and so far positive results... www.homebase.co.uk 38 NZHJ | MAY 2019 MORE AT www.hardwarejournal.co.nz