The Australian owner of Homebase is on the lookout for potential buyers of the DIY chain, just two years after it took over the company.

Wesfarmers bought Homebase, which has stores in Stroud, Gloucester and Cheltenham, for £340m.

The company is now understood to be working with investment bankers to review options for the future of Homebase, with the most likely outcome an outright sale of the business, as reported by Sky.

Wesfarmers ditched the British management team at the UK's second largest DIY chain and replaced them with an Australian team, which presumed the UK market would welcome its radically different retail model.

Since the deal, the British and Irish division has reported a 15.7 per cent slump in revenue and a £97m loss before tax.

The recent adverse weather has exacerbated problems, with garden centres reporting sharp declines in sales during the first quarter of 2018.

Homebase has 250 stores in the UK and Ireland, employing 12,000 people. Executives have already pledged to axe up to 40 underperforming stores. A Company Voluntary Arrangement (CVA), paving the way for ‎closures and rent reductions at other branches is also a possibility.

CVAs have become the go-to restructuring mechanism for retailers and restaurant chains in recent months. New Look  and Prezzo  have had CVAs approved by creditors, while Carpetright  is also planning to use one to axe scores of shops.

However, Toys R Us went into administration in the UK, less than three months after securing approval for its own CVA.