A DIY store which has been a mainstay in the town is set to close, leaving dozens of employees facing redundancy.

Staff at Homebase, in St Andrew’s Avenue, Colchester, were contacted on Tuesday, warning they are at risk.

It is understood there is no risk to the firm’s other store at Tollgate.

In a letter sent to staff, it states: “Over recent weeks, the company has been approached by an interested third party, who has expressed an interest in acquiring the site for redevelopment.

“The company as a result, and having considered the current financial performance at the store, has accepted a conditional offer put forward by the third party involved.

“I am, therefore, sorry to inform you that the company is proposing to close this store.”

Gazette: Homebase store on St Andrews Avenue, Colchester..

The letter states the closure will go ahead after a period of staff consultation.

Site reports will also be needed for any redevelopment.

The statement adds: “Because of the potential store closure, I can confirm all team members and leadership in the store are affected and are at risk of redundancy.

“Consequently, we are starting a period of consultation with you from today.”

Staff are being asked to put forward representatives from each department.

Any department with more than ten employees should have two representatives at the table.

The specific plans for the site have not been made public but the wording of the letter to staff suggests the “conditional offer” would be based on new proposals getting the go-ahead through the planning process.

Under Colchester Council’s current local plan, the land is not zoned for housing nor is it set to be included in the new plan, which is being decided upon by a Government inspector.

Paul Smith, leader of Colchester Council, said: “It is a shame for all the staff at Homebase but looking at the situation, I can see how the site would be desirable to a number of people.

“Housing, of course, would be at the top of many developers’ agenda but there is also an argument for something like a Premier Inn or Travelodge-style hotel to come in there or even a smaller supermarket site with the likes of Lidl.

"I would imagine any one of those three could be on the agenda.

“That said, with the train line running where it does, that may become less desirable for a housing scheme.”

Along with the entire group, the St Andrew’s Avenue store was taken over by Australian firm Wesfarmers, which runs the Bunnings Warehouse DIY chain.

At the time of the takeover, which cost Wesfarmers £340 million in January 2016, the firm was profitable.

But financial experts say the group’s performance has since deteriorated and is now set to post a £97 million loss for the first half of 2018.

Homebase is in direct competition with Kingfisher, which owns B&Q and Screwfix, both of which have a strong presence in Colchester. and has DIY market share of almost 40 per cent.

A Homebase spokeswoman said: “We can confirm that our Colchester store on St Andrews Avenue has entered into a period of consultation regarding the proposed closure.

"Our priority now is to continue supporting team members.”