Wesfarmers Takes A$1 Billion Charge as Foray Into U.K. Flops

(Bloomberg) -- 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.

For more detail on Wesfarmers’ writedown, click here.

“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.”

To contact the reporter on this story: Edward Johnson in Sydney at ejohnson28@bloomberg.net.

To contact the editors responsible for this story: Edward Johnson at ejohnson28@bloomberg.net, Peter Vercoe

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