Wesfarmers is expecting to make a loss of up to £230million after buying the DIY retail chain Homebase two years ago.
It’s now being bought by Hilco, which rescued HMV in 2013.
It is not certain that the new owners will shut down stores, however thousands of jobs are at risk.
Homebase currently employs 11,500 people across the UK.
Rob Scott, the managing director of Wesfarmers, said: "The investment has been disappointing, with the problems arising from poor execution post-acquisition being compounded by a deterioration in the macro environment and retail sector in the UK.
"While it is important that we learn from this experience, this should not discourage our team from being bold and diligent in pursuing opportunities to create shareholder value."
In exchange for paying £1, Hilco will receive control of the entire Homebase business, including its stores, inventory, property and rental lease agreements.
