Homebase is set to press ahead with a second wave of store closures that could see up to 80 DIY outlets shut, putting between 1,500 to 2,000 jobs at risk.
The DIY chain has 17 locations in Scotland, with one in Edinburgh based at the Craigleith Retail Park.
The company is next week expected to announce it will file for a company voluntary agreement (CVA) – an insolvency procedure used by struggling firms to shut under-performing stores.
Restructuring experts at Alvarez & Marsal will carry out the CVA.
It was reported in June Homebase was exploring further store closures through the procedure.
Homebase would have to secure the support of landlords to carry out a CVA.
But the property industry has expressed consternation at the procedure, which has been adopted by the likes of House of Fraser, Carpetright and Mothercare, saying it leaves them out of pocket.
Customers using the Craigleith Homebase outlet yesterday labelled it “terrible news” to be losing another big retailer.
Edinburgh resident Colin Fortune, 60, said: “It’ll affect the jobs in the area and secondly, you can get some really good deals on tools here. For smaller things it’s a lot easier to come here since buying things online, when it comes to clothing and tools, is a bit tricky as you don’t know what you’re actually going to get.”
Alison Beddow, 52, from Broughton, added: “I don’t have a car, so this is really the nearest place that I can get DIY supplies. I used to have a B&Q near me in Powderhall, but it’s just really annoying that all these types of stores are moving completely out of town, so if you don’t have a car you’re completely stuck.”
But fellow Edinburgh resident Phillip Wells said the potential closure of the Craigleith store would be no great loss. “I often get confused between Homebase and B&Q, so I think they are quite interchangeable and basically do the same thing,” he said.
“Edinburgh is a big city so having proper access to either isn’t crucial.”
The latest restructuring would come on top of a store closure programme the retailer has been carrying out since February.
A total of 17 Homebase stores have been shut this year and the business has also axed 303 jobs at its head office in Milton Keynes.
The store closures follow the sale of the business by its former Australian owner Wesfarmers to Hilco – a retail turnaround specialist – for £1.
Homebase was bought by Wesfarmers for £340 million in 2016.
Wesfarmers is known for its Bunnings chain in Australia and had attempted to import the home improvement brand to the UK by converting a host of Homebase stores into the Bunnings format.
Prior to the Hilco takeover, Homebase had 250 stores at its peak and 12,000 staff.