Wesfarmers Ltd.’s attempt to replicate its dominance of Australia’s home improvement market in the U.K. has flopped, with the company announcing a more than A$1 billion ($791 million) charge on its two-year-old acquisition of the Homebase chain.
Australia’s do-it-yourself market leader said Monday it will write down goodwill and stock and take a charge for store closures on the Home Retail Group Plc chain it bought for 340 million pounds ($480 million) in January 2016. It expects the U.K. unit to post a 97 million pound first-half underlying loss when it reports later this month.
The nation’s largest private employer is also facing troubles at home, writing down the value of its discount chain Target by A$306 million, blaming difficult trading conditions in an increasingly competitive market.
“The Homebase acquisition has been below our expectations which is obviously disappointing,” Managing Director Rob Scott said in a statement. “We need to address underperformance in our portfolio that is detracting from positive performance in other areas.”