Habitat finds itself in difficulty again. The furniture brand taken over by businessman Thierry Le Guénic in 2020 has not managed, over the last three years, to get its head above water. The current management has just requested the Bobigny commercial court to place it in receivership. Created in 1964 by British designer Terence Conran, Habitat has 25 stores in France and employs 450 people.
The brand was “faced with deep financial difficulties, largely attributable to previous failing management”. Just before its takeover, Habitat suffered an annual loss of 26 million euros. These difficulties have been “exacerbated by more recent factors,” explains Habitat management in a press release. Rising costs of raw materials, energy and transport have hit hard a brand whose prices were already high.
At the same time, inflation has eroded the purchasing power of its customers. The entire furniture sector, with the exception of Ikea which benefits from its low prices, has suffered for several months from the trade-offs that the French are forced to make in their spending. Store traffic, as a result, “declined significantly”.
Habitat’s financial difficulties precipitated the decline in sales. In recent weeks, stores have lacked merchandise to sell. “We no longer receive goods in our warehouse,” Ratiba Hamache, CGT union representative, explained last week. It’s been five months since the stores received a truck.” Habitat management finally points the finger at “internal social movements which disrupted activity”. The management of Habitat deplores that the restructuring necessary for the recovery of the brand could not be implemented due to the systematic opposition of the unions.
Habitat’s turnover has continued to decline since the takeover of the brand by Thierry Le Guénic. In 2019, Habitat achieved 100 million euros in turnover. Last year, it only made 80 million. To stem losses, management notably decided to terminate the lease of the Parisian store, located rue du Pont Neuf, opposite La Samaritaine, in advance. Seven other stores are unprofitable. Conversely, management has, for example, invested in the Nice store, which is showing better results.
“The decision to resort to the protection of the Bobigny Commercial Court aims to stabilize the financial situation of the brand which has never been profitable in France and to ensure the long-term viability of Habitat,” specifies the company. To date, Thierry Le Guénic does not intend to throw in the towel and intends to present a continuation plan to continue managing Habitat beyond the legal recovery phase. During the receivership period, stores will remain open. “The primary objective is to ensure payment of all suppliers and delivery of orders to customers,” specifies the group. Thierry Le Guénic is a serial buyer. Former manager of Smalto and Vanessa Bruno, he also bought Burton, Paule Ka, Lejaby and Chevignon.