Habitat Case Study
Who?
Habitat Retail is a retailer of household
furnishings in the United Kingdom, France, Germany, Spain, and has franchised outlets in other countries.
Founded in 1964 by Terence Conran, it
was sold by the IKANO Group, owned by
the Kamprad family (IKEA
man!), in December 2009 to Hilco, a restructuring specialist. On 24 June 2011 all
but three UK Habitat stores were put into administration in a deal to sell the
indebted furniture chain, with the brand and the three London stores sold to Home Retail Group.
Successful?
(Skeleton of these are from Wiki
so don’t use direct! Ha)
To begin with yes, but now- NO.
Terence Conran founded the company in
London in 1964, opening his own store to
market his Summa range of furniture.
[2] The
first Habitat store was opened in Fulham Road in
Chelsea[3] by
Conran, his then wife Caroline, Philip Pollock and the model Pagan Taylor.
[4] This
store became the Habitat template, with its quarry tiled floor, whitewashed
brick walls, white-painted wooden-slatted ceilings and spotlights creating a
feeling of space and focusing attention on the product.
[4]
Conran
has said the main reason for the shop's initial success was that Habitat was
one of the few places that sold cheap pasta storage jars just as the market for
dried pasta took off in the UK.
[3]
Our best-known designer,
Conran revolutionised the look of our homes and our dining-out habits, helping
to stimulate the evolution of the country's tastes. "People can only buy
what they're offered," he said, spreading his populist message that good
design is healthy as well as an inspiration and a delight. "The evolution
of our taste and consumption over the past 40 years is really quite incredible
- the choices we have today would be unrecognisable to a person from the 1950s
and Britain is an infinitely better place for it."
http://www.telegraph.co.uk/travel/destinations/europe/uk/london/737751/Magical-memory-tour-of-London.html
The
business expanded quickly in the UK throughout the 1960s and internationally
with the first overseas store opening in 1973 in Paris.
[2] Habitat
also published a catalogue that showed a range of products grouped together in
pleasant surroundings.
[5]
Even the chain's artful catalogue, with its photogenic young couples and
families enjoying bright, unstuffy Habitat-filled rooms, became a status
symbol. Sometimes, the catalogue was too forward-looking for customers: when
the 1973 edition featured a mixed-race couple in bed, letters of complaint
followed. http://www.theguardian.com/business/2011/jul/28/habitat-furniture-high-street
In 1981, the company's shares were floated on the
London Stock
Exchange[2] and
in 1982 merged with
Mothercare Group
to form Habitat Mothercare Group PLC.
[2] The
now-listed company bought the furniture retailer
Heal's and the
Richard Shops fashion chain in 1983.
[2] In
1986, the company merged with
British Home
Stores to form
Storehouse plc.
[2] In
1992 Habitat was purchased from Storehouse by
IKANO.
[2] In
October 2009, following several years of trading losses, the
Kamprad family, who own IKANO, put the company
up for sale,
[6] and
it was sold to Hilco, a restructuring specialist, in December 2009 with the
Kamprad family writing off the debts of the company and providing €50 million
(£45 million) of working capital while Hilco paid about €15m.
[7]
In June 2009 Habitat was criticised for taking advantage of
the list of trending topics on the social-networking service Twitter to promote its
products.[9] These topics included hashtags referring to Apple, the iPhone, Mousavi (the Iranian
presidential candidate) as well as other hashtags relating to the 2009 Iranian election protests. Because the products being promoted had nothing
to do with the subject of the hashtags Habitat's actions were considered to be spam.
Habitat's PR department reacted quickly to delete the
offending posts and blamed an intern for the inappropriate use of the hashtags
and apologised to Twitter users for their actions. However, the identity of the
intern was not revealed.[10] Habitat returned to Twitter in
September 2009.[11] See examples of outcry here: http://www.theguardian.com/media/pda/2009/jun/22/twitter-advertising
On 24 June 2011 Hilco, who had owned Habitat UK Ltd since
December 2009, announced that they were putting the company into administration.[15] Home Retail Group (owner of Argos and Homebase) purchased the Habitat brand, three Central London stores and the UK website.[16] The UK business was registered under
the name Habitat Retail Ltd, a wholly owned subsidiary of Home Retail Group.
Home Retail Group will retain approx 100 staff at the London stores and around
50 in head office, including many of Habitat's in-house designers, buyers and
merchandisers. Cafom, a company registered in France, purchased Habitat's
European businesses.[17] As of 11 September 2011, all other
Habitat stores in the UK had been closed by Hilco with around 750 employees
being made redundant.
"Of course I'm sad
that my love child, Habitat, appears to be dying, but I am more interested in
the future of my own business and design projects - that is my focus,"
said Sir Terence Conran. http://www.bbc.co.uk/news/business-13901123
Habitat said that,
"trading conditions have remained challenging for retailers of big ticket
items such as furniture" with the company continuing to make a loss.
"A return to profitability for the business in the UK appears unlikely in
the near term as many of the stores are expensive and poorly located for a
furniture retailer," it said in a statement.
http://www.bbc.co.uk/news/business-13901123
sasso29 July 2011 10:45am The reason Habitat has gone bump is because the quality of their
products is utter shit - this probably happened around the same time that Ikea
took over. However their prices remained the same - Ikea shit quality with
inflated Habitat prices - c'mon please brother...How long do you think that was
going to last? I think that Habitat customers have moved over to John Lewis - I
know I have. They seem to have filled the gap - quality products coupled with
interesting and exciting design. http://www.theguardian.com/business/2011/jul/28/habitat-furniture-high-street
deshepherd 29 July 2011 10:45am Doesn't everybody buy their home furnishings at IKEA these days? Well, the market segment that used to shop in Habitat in pre-IKEA days
almost certainly do (we definitely do!). When I bought my first flat in 1986
trips to Habitat and the Habitat catalog where standard requirements to either
find or get ideas for furniture and fittings ... nowadays its a walk around
IKEA - and you get to have meatballs and almondy cake at the end as well. I
think IKEA completely wrong-footed Habitat as they associated out-of-town
warehouses selling flat-pack furniture with low-grade MFI style stuff and
didn't see IKEA as competing with them (I met someone who worked at Habitat
when IKEA announced it was opening its first UK store ... all Habitat staff
were called to meetings to be assured that they could ignore all the publicity
about IKEA as it would not be competing for the same customers as them). That
said, Habitiat did make some good, solid items ... I've still got a bookcase I
bought 25 years ago which has been dismantled and reassembled for 5 moves
(including going to California and back) in that time. It would be suffocated by Ikea's ultra-populist ideas about sales and
pricing: "They found it very hard to understand why people would pay more
[for an item]." I think that sums it up ... on our
recent infrequent visits to Habitat my wife and my browsing has tended to be
limited to looking at the price of a kitchen table that my sister bought
followed by comments of "did she really pay that much for
a kitchen table"! http://www.theguardian.com/business/2011/jul/28/habitat-furniture-high-street
The Home Retail Group acquired the
three Central London stores in Tottenham Court Road, King’s Road
and Finchley Road and the transactional website. It has since begun to roll out
mini Habitat stores within Homebase branches nationwide. In October 2012 the first
of these mini Habitat stores open in Ruislip, followed by launches in Solihull, Ewell, Battersea, Horsham,Orpington, Leeds, Bracknell and Truro. By the end of 2013 Habitat said there will be 14
mini Habitat stores across the UK. Habitat has also begun to offer a selection
of Habitat products in 200Homebase and Argos stores nationwide and on the Argos and
Homebase websites. "The
style-led credentials of the Habitat brand, with its strong heritage, will be a
significant addition to the group's portfolio of own brands," said HRG
chief executive Terry Duddy. http://www.bbc.co.uk/news/business-13901123
the climate for British
retail almost unprecedentedly harsh, and Habitat's traditional core customers –
first-time property buyers, students and other young adults setting up home –
either disappearing or under terrible financial strain, Habitat's condition is
widely seen as terminal. The chain's long association with modern, often
foreign design, at a time when fashionable tastes have turned towards all
things British and vintage, is also a factor. After its sale to Home Retail Group was announced, Habitat's founder, legendary lifestyle entrepreneur
Terence Conran, who has not been involved with the business since 1990, issued
a statement: "I'm sad that my love child . . . appears to be dying."
http://www.theguardian.com/business/2011/jul/28/habitat-furniture-high-street
Habitat launched Platform, a design initiative and gallery
space housed in the King’s Road store in 2012 that now hosts a calendar of
design exhibitions throughout the year.
IKEA is Habitat’s contemporary- they could not compete with
IKEA’s accessibility and pricing- Habitat seemed dated in comparison. Ironic
that IKEA once owned it? Run the brand down?
Application:
Identify what made brand successful and expand on this
rather than trying to reach a greater number of people through product
expansion
Know your consumer! Don’t lose integrity of brand and the
brand followers. Including looking for investment/ sell out to other companies-
can drive business down especially if not enough focus!
Have a simple showroom so focus is on the product
Cataloguing and archiving- available and can be made if
necessary
Focus on design and purpose not money i.e. Habitat’s
decision to enter the London Stock Exchange
Everything seems to be online, but be careful not to “spam”
people’s news feeds with unrelated content/ hashtags (integrity and seriousness
lost) Plan considered content that engages users!
Launch concessions in other stores- widen reach without
alienating existing consumers- make product available. Mini stores/pop ups-
smaller selection.
Have a “platform” which is separate to what the brand sells
e.g. Habitat’s Platform which showcases design and exhibitions- this could be
applied to other brands. It is PR through association and provides the
opportunity for interior companies to expand outside of product e.g. events/
launches etc. Also gives brand something to talk about and converse with
clients about other than always aiming for a sale- reference point.
Offerings/ collections to suit all pricing/budget
requirements.
Know your competition and what they are doing- don’t let
them become a “threat”
Make sure you do not “sell out” and maintain focus
Location- is it product suitable i.e. Chelsea Harbour/ IKEA
stores in industrial parks with free parking etc. Who are the competitors
around you.
Quality!
Sources of information:
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