INTERVIEW / Wanted: something else to design: He launched and lost Habitat, and now Terence Conran is back where he began - running a restaurant. But he also has his eye on cars, hotels . . .

SIR Terence Conran is on a high. Look at that affable countenance, the ready smile. He's ever so pleased with himself, and the rave reactions for his latest venture. It's nine in the morning, the workers in his new restaurant are already hard at it, getting ready to feed 1,200 mouths, but he's sitting around chatting. Not like him. Even his suit looks contented rather than crumpled. Not like him.

Ah, he's noticed something. There's a worn patch on the carpet in the private dining room. The kitchen staff have been using it as a short cut. Quick frown, quick note to manager. Then back to beaming and boasting. 'I never expected it would be such a success so quickly. It's probably the best thing I've done in my life.'

He's the man who gave us Habitat, launched a million middle-class kitchens, dragged design into all our high streets, built up an empire of 1,000 stores with a turnover of pounds 1.5bn and a staff of 33,000. How can opening a restaurant compete with all that? OK, Quaglino's in St James's is rather an unusual restaurant, the brightest, smartest in London, England, northern Europe. At least for the next half-hour, till something else comes along. All the same, it's only eating.

Ah, but you have to remember how down he was only two years ago. The Man Who Could Do No Wrong had turned into Yesterday's Man. According to some City headlines. 'I was never as down as people said I was, nor was I ever such a star in the Sixties. The landscape we live in is gently undulating, full of little hills and little valleys.' Yes, but you did run into a couple of deep chasms. Which was fortunate for you.

'Fortunate?' he said, putting more sugar in his coffee. Tut-tut, at 14 stone, is that wise?

Failure is part of the process, I suggested. As a businessman, you haven't experienced the full spectrum till you've lost your job or had another setback. You're 61. You wouldn't want to retire, would you, only having been a success. What would you have learnt?

'Yes, it was a learning process, but I would rather those two bad things had not happened, thank you very much.'

Briefly, and feel free to skip, the first arose out of the rise and rise of Habitat. 'When you're young and ambitious, with a young and ambitious team, you have to keep expanding. I opened a shop in the first place because I made a chair I was proud of and I thought if it's good, how do I get it to the public? Then I opened more shops in order to get the prices down, so that more people could afford my chairs. We went public because I ran the company democratically and I wanted the staff to realise the value of their shares. You must realise I was a post-war art student, an idealistic designer who wanted to improve the quality of the world we were all going to live in . . .'

Thanks, Terence, forget the message, what went wrong? Not Habitat's merger with Mothercare, he says, strange though that looked from the outside, nor even with British Home Stores. It was the bringing in of Michael Julien, who became chief executive of the main company, Storehouse. 'I deliberately selected someone different from me, who had talents I didn't have, such as a passion for financial management and for logistics. My talents are towards creating, imagining and marketing, but I can delegate, despite what some of my critics have said. You can't run restaurants and shops without delegating. Anyway, what I didn't realise was that the person I brought in wanted to run the empire himself. When the recession hit us, and profits dropped, it was him or me. And I decided to leave.

'He's a perfectly good man. It was all my fault. I should have chosen the other person I had in mind. If I had, I think I would still be running Habitat today.'

The other failure was Butler's Wharf, his development in Docklands, which went into receivership in December 1990, losing him pounds 7m. 'It wasn't the money. I have made far too much money in my lifetime. It was the failure of my dream. It had begun in 1981 when I was on a boat trip down the Thames and thought how wonderful it would be to resurrect these vast derelict warehouses. I did it, then the recession came along.'

Today, his business empire is smaller, leaner. He has two Conran shops - in London and in Paris; an architectural company; six London restaurants. He's also chairman of the Design Museum, which he set up, donating pounds 14m of his own money.

It's taken him 40 years, battling out there, and now he's come full circle. His first venture, in 1954, long before Habitat, was a little caff in the West End called The Soup Kitchen. 'It cost me pounds 267 to build, decorate and equip.' Funny how multi-millionares always remember the small sums. 'And we sold soup at 7 1/2 d (about 3p now) a bowl. The first night, we were invaded by 40 tramps, who thought it really was a soup kitchen, so we let them eat for free. The next night, the cast of Guys and Dolls came in and we were a success from then on.'

Along the way, he has also spawned a family empire, with five children, most of them busily designing. And also, let me see, three wives? He nodded. Then why do you only mention one, Caroline, in Who's Who? She was at one time the Sunday Times cookery writer, till going to university as a mature student and becoming a psychotherapist. They've been happily married since 1963.

'I forgot the others. Honestly, that's all it is. I didn't realise people normally list all their marriages. You might as well list mistresses.' Have you any? 'Not at the moment, but most men have in the course of a lifetime.'

How could you forget such a great literary figure as Shirley Conran, your second wife? Was it because you weren't speaking to her? 'Oh we do speak now. In fact she came to the opening of Quaglino's. Not many people know that I was the first to tell her about the goldfish . . .'

Do tell. There are probably Ph D students even now trying to work out the origins of that unusual scene in her sensitive novel, Lace.

'I'd been to this extraordinary wild, midsummer party in Finland. A group of young men went into the lake and came out with nets filled with sticklebacks. They then introduced these little fish into the, er, private parts of some vodka-soaked ladies. I told Shirley all about this scene . . .'

With Shirley, he had two sons, the younger of whom is Jasper, the dress designer. As a father, how did you react when he came out? 'He never had to come out, not in that sense. I knew from the age of five he was gay. I had a couple of friends in the house one day and they were gay, as many people in the creative world are. They saw Jasper playing, and said he'll turn out gay. I don't know how they knew. It mystifies me why people think it should bother me. It's no more important than saying someone's vegetarian.'

Terence eats meat, and most things really, always has done, and is particularly fond of chips cooked in horse fat. 'That's how they do them in northern France, on the Belgian border, where they have the best pommes frites in the world.' Are they on the menu at Quag's? 'No, not quite. You can't get horse fat here.'

Quaglino's has cost him pounds 2.5m and taken almost two years to set up. There's a staff of 187 and seating for 420. Feminists are upset by his cigarette girls, tottering around on their high heels. 'I'm told we're degrading them. I don't think we are. They're out-of-work actresses who would be sitting at home if they weren't here. It gives them work and keeps them sharp, putting up with the jokey remarks.

'I ate here last night, for only the second time, and people continually came up and congratulated me.' They would, wouldn't they? 'Certainly not. People in restaurants are in a hypersensitive mood. When they love it, they tell you, but by God, they'll soon tell when they don't like it. I feel proud of what we've done. Most of the front staff are French, while most of the 60 chefs are British. We have some very energetic, exciting young people in this country just now, wanting to do things. I used to feel guilty as a shopkeeper, when all I was doing was selling. I always disagreed with the Thatcher philosophy that the service industries matter most. They don't. Manufacturing is what will save this country, producing well designed goods that the world wants.'

But you're still in service, servicing stomachs. 'No I'm not. I'm a producer. I produce food. People think it's mad to open a new West End restaurant in a recession, but I like to think our success might be the spark this country needs, to light the fire to get us out of recession. During the Thirties in the US, it was designers like Raymond Loewy and Walter Dorwin Teague, producing optimistic, streamlined designs, who led the way out of the Depression. After all, something's got to get us out of it. This Government clearly can't'

He jumped up, worried about the sudden silence. All the telephones had gone dead. Stomachs all over London could be cut off. Well, better than the computer packing up. They have one on which waiters record the orders, which then appear as print-outs in the kitchen. Isn't science marvellous? 'Yes, but when it goes wrong, it goes fantastically, horribly wrong.'

Hasn't the excitement worn off by now? It must be all of four weeks since you opened. It seems to me that what has motivated you in life is not money or vanity but fear of boredom. 'That could be true. I've never sat on a psychiatrist's couch, so who knows what makes me tick. But my object is simple - to get through life in the most enjoyable manner.'

So what's next, Tel? 'I'd like to design a car, a whole car. We did the inside of the Land Rover Discovery. I wanted to do the outside as well, but - typical British compromise - someone else designed the outside. I'd also like to do a hotel. In fact I'm in discussions about one. I'm not sure I'd like to run a hotel, but I'd like to design one, top to bottom.'

Well, that might keep boredom away for a few more years. Could you try hard, and recall the last time you were really bored?

He moved to a window, the better to watch the staff, or so I thought. He was looking out of the window, vacantly, staring at nothing. Then he rested his head on his arm, still leaning against the window. 'This was me, when I was aged seven. I remember it well, because I was very, very bored . . .'

(Photograph omitted)