LONDON – Habitat UK, the once-trendy home furnishings retailer, was placed in administration Friday with only three British stores assured of survival.
Home Retail Group bought the U.K. rights to the Habitat brand, its website and three stores in London for 24.5 million pounds ($39 million) in a sale arranged through the administrator, Zolfo Cooper LLP.
Thirty other British Habitat stores are in the hands of the administrator and remain open for the time being.
Restructuring specialist Hilco UK, which acquired Habitat in 2009, said it was in advanced talks about selling the profitable remainder of the business, including 27 stores in France, six in Spain and five in Germany, and expects to complete a deal in August.
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While struggling in Britain, Habitat expanded on the continent, recently opening its largest store in Antibes in France; new stores in Toulouse and Madrid will open soon, Hilco said.
“The sale of the brand and three flagship stores to Home Retail Group secures the future of Habitat and will enable the business to move forward in the U.K.,” said Phil Wrigley, executive chairman of Habitat.
Famed designer Terence Conran opened the first Habitat store in 1964, and ended his role in running the business in 1990.
Home Retail owns Homebase and the Argos catalogue stores, and commands about 10 per cent of the British homewares market.
Home Retail’s shares were down 2 per cent at 158 pence in afternoon trading on the London Stock Exchange.
Ramona Tipnis, retail analyst at Shore Capital Stockbrokers, was skeptical about how the Habitat line would fit into Home Retail’s middlebrow range. Beyond that, “the furniture market is suffering from consumer reticence, with expenditure on big-ticket items being scaled back,” she said.
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