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By James Davey
LONDON, Sept 25 (Reuters) - Homebase, Britain'ssecond-biggest home improvement retailer, is seeing evidence ofsuccess from its costly store refit programme and aims to expandit to 15 of its outlets by year end.
The company, owned by Home Retail Group Plc, aimsto stand out in a crowded market with a refurbishment programmecosting 1 million pounds ($1.6 million) per store and which itsays boosts sales by around a fifth at each revamped outlet.
"Clearly there's a lot of growth potential here," saidmanaging director Paul Loft on a media visit to Homebase'sBattersea store in southwest London.
"Stores that are refitted are 20 percent better than theywould have been if they weren't refitted," Loft said, notingthat the online/multi-channel element of the business wasgrowing more than five times faster than the overall business.
Earlier this month Homebase posted an 11 percent rise inquarterly sales at stores open more than a year, following athree-year run of falling profits.
It said the turnaround was mainly driven by sales ofseasonal products which benefited from Britain's warm summer,but also partly reflected changes it has made to stores,products and customer service.
Britain's home improvement market - where Homebase competeswith the likes of Kingfisher's B&Q, market leader, andTravis Perkins' Wickes, is worth 35 billion pounds ayear.
So far Homebase has refitted nine stores and is targeting 15by year end as part of a five-year investment programme.
Parent Home Retail Group has projected capital spending ofaround 175 million pounds annually for the next three years, ofwhich around 50 million is earmarked for Homebase.
The Battersea store showcases key aspects of Homebase'srefit and includes Laura Ashley and Habitat concessions,as well as more technology such as touch screens to aidcustomers' project decisions.
Homebase said the analyst consensus for its profits infiscal year 2014 is 15 million pounds, up from 11 million infiscal 2013.
Loft said a recent upturn in activity in Britain's housingmarket was yet to feed through to Homebase. "We see in ourmodelling of the business, as housing transactions move there'sa six months lag into sales into our business," he said.
