Published on 24 Jun 2011 Sections ,

Jobs at risk as Habitat goes into administration

Habitat stores outside London are put into administration threatening 900 jobs in the indebted furniture chain, while a £25m deal sees branches in the capital sold to the owner of Argos.

The home furnishings chain Habitat has announced that administrators have been appointed to its 30 UK stores outside London.

Habitat’s owners Hilco struck a deal with Home Retail Group – which owns Argos and Homebase – allowing it to buy the UK rights to the brand, the website and three stores in central London for £24.5m.

Hilco said the stores not included in the deal will trade as normal while the administrator, Fraser Gray of Zolfo Cooper, talks to interested parties.

Around 900 jobs will be at risk in the 30 stores around the UK. According to reports, affected staff may be able to join employment within Home Retail Group.

Hilco added on Friday that it was in advanced talks to sell the more successful European operation, which consists of 27 stores in France, six in Spain and five in a Germany, to a major European listed business.

Jobs at risk as Habitat goes into administration

Chain in debt

The owner said the Habitat chain posted losses of 100 million euro (£88 million) over the past three years and a return to profitability in the UK appeared unlikely in the near term as many of the stores were expensive and poorly-located for a furniture retailer.

Hilco acquired the debt-laden Habitat in 2009 from the Ikano Group, the company founded by the Kamprad family which owns Ikea.

It paid almost nothing for the chain, which was carrying heavy debts, while Ikano also agreed to inject £45m into the business.

Set up by design legend Sir Terence Conran in 1964, Habitat came to epitomise London’s young and trendy image during the 1960s with a range of pastel colours and products based on Conran designs.

Habitat’s collapse followed a poor week for UK retailers.

Homeform, the owner of Moben kitchens, bathroom chain Dolphin and Sharps bedrooms, said yesterday that it intended to appoint administrators, putting 1,300 jobs at risk, while on Wednesday Comet owner Kesa said it was considering a sale of the electricals retailer after it posted losses of £8.9m.