Habitat is set to disappear from everywhere but London in a move threatening around 900 jobs in the UK.
Talks are reportedly under way between current owner Hilco and Home Retail that would see the Homebase and Argos owner buy the UK rights to the Habitat brand and three stores in central London for between £20m (€22.44m) and £30m (€33.67m).
It is understood Hilco will retain the Habitat stores in Europe, but the remaining 30 UK stores may be put into administration in a move threatening around 900 jobs.
The restructuring of Habitat completes a terrible week for UK retailers, as consumers cut back in the face of the squeeze on household incomes.
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 (€10m).
Set up by design legend Terence Conran in 1964, Habitat came to epitomise London’s young and trendy image during the Sixties with a range of pastel colours and products based on Conran designs.
Private equity group Hilco acquired the debt-laden Habitat in 2009 from the Ikano Group, the company founded by the Kamprad family that owns Ikea.
It paid almost nothing for the chain, which was carrying heavy debts, while Ikano also agreed to inject £45m (€50.5m) into the business.
Discussions over a sale were said to be continuing last night and if successful Home Retail is expected to sell Habitat-branded products through its Homebase and Argos outlets.