A leading DIY chain has slashed €687m from the value of its business.

The owner of Homebase made the announcement today, against the backdrop of falling sales.

Troubles have been blamed on the ongoing turmoil in global financial markets.

Home Retail Group has decided to take the dramatic step to cut costs and reduce investment in the Homebase stores, amid a bleak outlook for the wider economy.

-- Advertisement --

According to the group, which also runs Argos, like-for-like sales fell by 'high single digits' in both brands for the year ending in August.

Group boss Terry Duddy said trading conditions had "worsened in the turbulent recent weeks".

"If these conditions continue through our peak trading months of November and December, the profit outcome for the year would likely be around the bottom of current market expectations," he said.

The group's underlying profits fell 19% to €153m in the six months to August 30.

But the inclusion of the Homebase writedown reduced the firm's overall pre-tax loss to €554m.

(PR/JM)