It was the furniture chain that revolutionised homes in the Swinging Sixties.

But Habitat, the one-time pinnacle of British design, has itself fallen out of fashion. The retailer, which has 33 stores in the UK, is expected to announce within days that it is being broken up.

Homebase owner Home Retail Group was in talks late last night to buy three key London branches, Tottenham Court Road, King's Road and Finchley Road, as part of a £20million to £30million deal.


Swinging Sixties: Sir Terence Conran's Habitat revolutionised home decor, introducing a generation of young homeowners to modern design

If negotiations are successful, Habitat is expected to place the remaining 30 of its UK stores, which are dotted around the country, into administration.

Around 900 jobs are at risk from the possible closure of the shops.

As part of the deal Home Retail would also buy the rights to the Habitat brand in the UK and use it in its Homebase store chain.

 
More...
Will £1billion sale mean AA-style cuts at RAC affecting millions of its members?
Britain's battered retailers have been hit hard by shoppers reining in spending on all but the most essential of items, and the downturn has seen the collapse of High Street names including Woolworth's and Zavvi.

Hilco, the owner of Habitat – which has expanded into France, Spain, Germany and Italy – is understood to be selling the international business separately. It has been performing strongly and would not be affected by any administration.

If the UK business is plunged into administration, it would mean the Habitat name is virtually wiped off shop fronts on the High Street.


If the deal goes ahead Home Retail would buy the rights to the Habitat brand in the UK and use it in its Homebase store chain

It would be a major blow to the king of Britain's interior design, Sir Terence Conran, who revolutionised the furniture market when he opened his first Habitat store in 1964.

This was decades before rival Ikea set up shop in the UK with its cheap flat-packed designs which have stolen the lion's share of customers.

The grand old man of British design introduced a generation of young home-owners to pastel kitchen chairs and garlic presses.

At its peak the chain operated 38 stores in the UK and expanded internationally with 24 stores in France, six in Spain and five in Germany.

But Sir Terence left the business long ago and Habitat lost its way under the ownership of the Kamprad family, heirs to the Ikea fortune.

Just 18 months ago they passed it over to Hilco, giving the retail specialist a £45million 'dowry' to take the business off their hands.

Hilco, which has been trying to turn the business around, has been talking with rival retailers about various options for the business including a licensing deal.


The Habitat store in Tottenham Court Road in London would be one of only three to survive if the deal goes through

Details of the agreement with Home Retail were still being thrashed out last night.

Habitat would only push the button on the administration if it can reach an agreement to sell the brand and the three stores to Home Retail.

Experts say the Habitat brand would sit well within Homebase, helping to draw in a new set of middle-class customers.

The company is keen to develop the brand but is unlikely to open more stand-alone stores even when financial conditions improve.

Hilco has previously sold the Schreiber and Hygena brands to Home Retail following the collapse of MFI.

This week has been one of the gloomiest weeks for Britain's battered retailers.

On Thursday the firm behind the Moben and Dolphin bathroom brands took the first step towards administration.

Habitat, Home Retail Group and Hilco all declined to comment last night.

SHAPING TASTES OF A GENERATION

The 1964 opening of Habitat in a then unfashionable area of Chelsea revolutionised the world of interior decorating and changed the tastes of a generation.

The concept, by young designer and furniture restorer Terence Conran, was to bring furniture and contemporary design to the masses, at affordable prices.

From the beginning, Habitat sold everything you could want for a home, with display living rooms and kitchens set up in the stores to show how items could be arranged to create a particular look.

The new generation of middle-class baby boomers had been to university and had their pick from an expanding jobs market.

They were setting up home earlier and wanted chic but low-maintenance homeware: cutlery that did not need polishing, tables that looked good without tablecloths, and beds that could be made easily with a duvet.

Conran’s store had a unique combination of modernist minimalism and earthy comforts that appealed to these young, educated professionals by offering pine furniture and colourful storage jars in place of old-fashioned, dark and heavy furnishings.

The chain rapidly expanded but the clever designs were soon mimicked by cheaper rivals and by the late 1980s the company was suffering financial difficulties.

In 1992, Habitat was acquired by the Ikano Group, a conglomerate controlled by the Kamprad family, whose patriarch Ingvar founded Swedish furnishings giant Ikea.

However, Ikea’s success did not rub off on Habitat with losses reaching £13.4million in the year to March 2008.