Hilco-backed buyout on the cards at Habitat

The deal is likely to be completed next week. It is thought to be backed by Hilco’s investment arm Valco Capital. One source close to the situation said a Hilco-backed management buyout, led by chief executive Mark Saunders, was “likely to happen” but that Habitat was “unlikely to maintain its current shape”.

It is thought Ikea parent, the Kamprad family, which put Habitat up for sale in October, would only accept a sale on a going concern basis and is trying to find a buyer before Christmas, so the furniture chain is not on its balance sheet next year.

A source close to Habitat said: “A liquidation sale won’t be considered. I’m confident that whoever buys the business will broadly support the management team.”

It is understood because of Hilco’s association with breaking up retail chains, Habitat’s owner may insist on a clause in any contract, preventing a break-up.

Hilco is said to support the loss-making retailer’s current strategic direction, with no plans to shut any of the 35 UK stores or pull out of mainland Europe.

The Kamprad family is thought to have written off Habitat’s debt in order to secure a quick sale.

Saunders and Hilco declined to comment.