Home Retail Group plans to shut about 80 Homebase stores by the end of 2018 as the home- improvement chain adjusts to an age of online shopping.

About a quarter of the chain's outlets will close as the business is scaled down to adapt to a shift in shopping habits, the owner of the UK's Argos chain said today.

Homebase managing director Paul Loft will step down, it also said.

“The current estate is too large relative to the demands of the U.K. market and changing digital shopping patterns,” Home Retail said as it reported first-half earnings that missed analysts’ estimates.

“The result should be a more efficient and productive estate that can support future investments.”

The downsizing of the 316-store Homebase chain marks a further shift in the retailing landscape as more consumers shop for goods online from tablets and mobile phones.

An upgraded website helped Homebase boost multi-channel sales by 12 per cent in the first half, the company said today.

Home Retail shares fell as much as 6.2 per cent in London trading and were down 2.9 per cent at 170.5 pence.

Homebase will close stores through scheduled lease expirations and a series of property transactions, the company said.

About 30 outlets will shut in the current financial year through February, it said.

“We think the Homebase plan makes sense,” Flor O’Donoghue, an analyst at Davy Research, said in a note. “There is simply too much DIY capacity in the U.K.”

Home Retail said so-called benchmark pretax profit rose 13 per cent to £30.9 million pounds in the first half of the financial year.

Reuters