Shares in the owner of DIY retailer Homebase fell 3.8 percent in early trading this morning, after it announced plans to close 25 per cent of its 323 stores by 2018.
Home Retail Group, which also owns Argos, said the current estate was too big relative the demands of the UK market and out of sync with shifting shopping patterns, which are moving away from the physical store and towards digital.
The FTSE 250 company conceded the current set-up was costly to run, and there was a "tail" of stores that are "either unprofitable or are in decline". The closures are part of the company's "Homebase Productivity Plan" which aims to improve the competitiveness of Homebase's offer.
John Walden, the group's chief executive, said:
Homebase will pursue a three-year plan through to the end of FY18 to improve the productivity of its store estate, strengthen its propositions and accelerate its digital capabilities by leveraging Argos' investments. This will position Homebase as a smaller but stronger business, ready for investment and growth.
The company enjoyed a rise in profit before tax of 13 per cent to £30.9m, with sales climbing three per cent to £2.6bn for the six months to 30 August.