Habitat, the home furnishing chain founded by Sir Terence Conran in 1964, is set to have a new owner as soon as next week, with its management team and Hilco, the restructuring specialist, front-runners to buy it.
The Kamprad family of Sweden, who are heirs to the Ikea fortune, put Habitat up for sale in October after years of losses. The retailer has not reported a profit since the end of its 2004-05 trading year.
A number of bidders are understood to have submitted formal offers to Lazard, the investment bank that has been appointed to sell Habitat. But the retailer’s management team — led by Mark Saunders, the chief executive — is understood to be in a strong position, as is Hilco, which tried to buy Woolworths last year.
Habitat and Hilco declined to comment.
The rival bids could present a stark choice for the Kamprad family, who have stuck by Habitat through years of losses and have a reputation for ethical investment.
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While the management would pursue a three-year turnaround plan that would keep existing stores open, Hilco is more likely to break the business up. However, it is thought Hilco is willing to pay more for Habitat.
The high-street chain has long been a drag on the Kamprad family’s finances. In 2004, Ingvar Kamprad, the founder of its parent company, Ikano, which is a sister company of Ikea, said of the retailer: “Maybe it’s one of the many, many mistakes I have made.”
Mr Saunders joined Habitat from Levi Strauss in April and formulated a plan that promised to return the company to profitability by 2012.
Habitat, which employs more than 1,500 people and operates 71 stores across Europe, launched a marketing campaign this year fronted by Helena Christensen, the Danish supermodel. Despite poor trading in the spring and summer, it is understood that business has boomed in the run-up to Christmas and bidders are keen to seal a buyout deal as early as possible in the festive trading period.
Habitat was one of a number of businesses that were hit hard when credit insurers pulled cover from a number of companies in the retail sector this year.
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The retailer has 35 outlets in the UK, 26 in France, five in Spain and five in Germany, as well as an online store.