Habitat chief executive to stand down as retailer struggles to reverse losses

The Conran-founded chain faces tough times as consumer spending slows and senior staff quit
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The Independent Online

Habitat was yesterday hit by the loss of its chief executive, amid mounting concern about the finances of the company. The iconic homewares retailer, once one of Britain's best-loved high street chains, is also facing speculation that other senior executives could be heading for the exit.

Jens Nordahl, who has been Habitat Group chief executive since 2003, has resigned to join Kirkbi, where he will be responsible for Lego Holdings and a number of other investment interests. Germany country manager Kurt Krauter is also thought to be leaving.

The departures are a blow to the UK-based international home furnishings retailer, which was founded in 1964 by the legendary designer Sir Terence Conran. Habitat is thought to have found trading challenging in the UK recently, in common with most other furniture retailers, as consumers rein in their spend on big-ticket items.

For the year to 25 March 2007, Habitat recorded a pre-tax loss of £10.9m, compared with a loss of £3.7m the previous year. Its like-for-like sales tumbled 10 per cent over the period, according to accounts filed at Companies House.

This year, Habitat is thought to have brought in an executive from Ikea to address some of its operational issues in the UK, but, as a private company, has not yet filed details of its financial performance.

Robert Clark, a senior partner at analyst Retail Knowledge Bank, said: "Habitat has been under- performing for several years. It has not moved on, and furniture retailing is very competitive."

Mr Clark said that in 2007 Habitat had sales per sq ft of £150. He said: "This is incredibly low, they should be well above £200 at about £250."

He added that some of the new stores it has opened, such as its store on London's Regent Street, could be a financial "millstone" around Habitat's neck.

A further blow was the closure of its two stores in Ireland, in Dublin and Galway, last month. Habitat's franchise partner Conai Designs (Ireland) applied for voluntary liquidation. Habitat has 38 stores in the UK, 24 in France, six in Spain and five in Germany. It also sells its products through retail partners in a further 14 markets.

However, Habitat's new-format stores in the UK – which give a nod to Sir Terence's legacy in terms of style and contemporary design – are thought to be delivering much stronger sales than the rest of its estate.

Nevertheless, the retailer may face further senior departures. Sources close to Habitat said that UK merchandise director Julian Rees has entered a consultation period over his role, which could result in his departure. Up to 15 UK employees are understood to also be in consultation over their roles, although it is unclear if any of these potential redundancies are linked to Habitat moving its head office from central London to east London.

Speculation is also mounting that UK country manager Ruth Dangerfield could also leave in August. Ms Dangerfield is understood not to be pleased that Habitat promoted France country manager Paul-Henri Cecillon to the newly created role of group head of retail this spring.

M. Cecillon, who has relocated to London, was brought in to sharpen working practices between each country where it trades. Ms Dangerfield reports to M. Cecillon.

Ms Dangerfield has implemented a number of changes since she joined from fashion brand Diesel in May last year. She has replaced about 60 per cent of senior employees and has overseen the launch of its new store format.

A source close to Habitat said that its parent Ikano, which acquired Habitat in 1992, may consider putting the company up for sale but had received no indication that this was imminent.

A Habitat spokeswoman confirmed Mr Nordahl's departure, but declined to answer questions last night.