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Habitat France shops at risk as firm faces financial issues

The group’s owner says he wants the stores to remain open but unions say that they ‘have not had a delivery’ of new stock in six months

A view of the Habitat logo on a shop in Bordeaux, Nouvelle-Aquitaine

Habitat France split from the British group in 2011, but has suffered worsening financial difficulties since 2019 Pic: Sylv1rob1 / Shutterstock

Homeware and furniture group Habitat France has said it is struggling significantly, after requesting to be placed in judicial receivership following the closure of eight of its French stores.

The business, which was bought by businessman Thierry Le Guénic in 2020, has continued to struggle over the past three years. He has now asked for protection from the Bobigny Commercial Court.

Habitat was originally created in 1964 by British designer Terence Conran as a way to bring ‘affordable’ design into more homes. It opened its first store in Paris, in the Necker neighbourhood, in 1973, to immediate success. 

Yet, Habitat France is no longer part of the British group after it was acquired by French distribution company CAFOM in 2011. It now has 25 stores and employs 450 people in the country.

Financial difficulties

In a statement yesterday (November 30), Habitat France said the group was currently “faced with profound financial difficulties, largely attributable to past mismanagement”, and said it was losing €26 million per year.

The difficulties have been “exacerbated by more recent factors”, it said, citing increased energy, transport, and raw material costs; and the public’s reduced purchasing power.

People have “significantly reduced” their shopping habits, the store said, and noted that all furniture stores - with the exception of low-cost giant Ikea - had suffered as a result. 

Habitat France has even struggled with having enough inventory on the shop floor over the past few weeks, said Habitat worker and CGT union representative Rabita Hamache.  “We are no longer receiving inventory in our warehouse. The shops have not had a delivery for five months.”

The management team have partly blamed the difficulties on “internal social movements that affected the activity” of the shops, and said that some required restructuring of the business had not been possible due to the “systematic opposition of unions”.

Stores to remain open during receivership

Mr Le Guénic has been making significant changes to the operation in recent months, including closing its loss-making Paris store on rue du Pont Neuf, along with seven other non-profitable sites. In contrast, it has invested more in its shop in Nice which continues to present better results.

Mr Le Guénic has said he will keep the group’s other stores open during the judicial receivership process in a bid to recover the profitability of the business.

In a statement Habitat France said: “The decision to seek protection from the Bobigny Commercial Court is intended to stabilise the financial situation of the company, which has never been profitable in France, and to ensure Habitat's long-term viability.”

Mr Le Guénic has said he has no intention of “throwing in the towel” and intends to present a plan to continue Habitat’s operation beyond the receivership phase.

“The overriding objective is to ensure payment of all suppliers and delivery of orders to customers,” the statement concluded.

Serial investor Mr Le Guénic also owns the retail brands Burton, Paule Ka, Maison Lejaby, and Chevignon.

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