Homebase pulls plug on kitchens

SAINSBURY'S Homebase is pulling out of the kitchens business in a move that will lead to the loss of 550 jobs.

The kitchen departments, which featured in 99 Homebase outlets, will close with the space being devoted instead to tiles and floor coverings such as rugs. The decision will cost pounds 15.5m this year, including pounds 6.5m in redundancy charges.

David Bremner, Sainsbury's deputy chief executive and the chairman of Homebase, said the steps would add to profitability next year. The kitchen business had been forecast to lose about pounds 5m in the current year.

Sainsbury's Homebase accounted for 11.8 per cent of the UK kitchen market, and its decision to pull out will be good news for the other leading players, such as MFI, Magnet, B&Q and Moben.

The cuts are the latest in a series of redundancy programmes at Sainsbury's as the struggling supermarket group seeks to make its operations more efficient.

Separately, Wilkinson, a Nottinghamshire-based retailer, yesterday unveiled plans to open five of its household goods stores in Wales in the next 12 months. It is also building a new distribution centre near Newport, creating over 1,000 new jobs in Wales.