ALAMY/HOMEBASE

Rob Scott's Wesfarmers has taken hit after closing concessions

But it has taken a £584million writedown after admitting mistakes with the Bunnings UK business, which is set to post a half-year pre-tax loss of £97million reflecting the "poor trading performance" of Homebase.

A review has been launched to look at how trading can be improved at Homebase, as well as studying the performance of pilot Bunnings stores.

It could close up to 40 stores, putting about 2,000 jobs at risk. Homebase has about 250 outlets around the country employing 12,000.

Bunnings veteran Peter Davis, who had been running Bunnings UK, has retired and is replaced by Damian McGloughlin.

Wesfarmers managing director Rob Scott said: "The Homebase acquisition has been below our expectations, which is obviously disappointing.

"In light of this, a review of Bunnings UK has commenced to identify the actions required to improve shareholder returns."

Since the takeover, popular ranges such as bathrooms and kitchens have disappeared, along with concessions such as Laura Ashley and Habitat.

Scott added: "A lot of the underlying causes of the losses we've reported today have been through our doing.

"Similarly, we see an opportunity to undo some of those issues and improve performance."

Bunnings group managing director Michael Schneider added: "It is clear that a significant amount of change has been driven through Homebase since the acquisition and the disruption caused by the rapid repositioning of the business has contributed to greater than expected losses across the Homebase network."

Broker Jefferies said: "This feels like the beginning of the end for Bunnings in the UK."