HABITAT has been put up for sale by its Swedish owners amid accelerating losses at the retail chain famed for bringing high-end design to the masses since the 1960s.

The retailer, founded by Sir Terence Conran, has been hit hard by the credit crunch as shoppers have shied away from splashing out on big-ticket items such as furniture. But retail experts say many of the chain’s woes are self-inflicted, arguing that it has suffered from poor customer service, the wrong product mix and overpricing.

The Sunday Times has learnt that the Kamprad family, heirs to the Ikea fortune, have appointed bankers at Lazard to carry out a strategic review of the business, which could lead to a sale of the company.

Habitat’s latest accounts for the year to March 30, 2008, show the UK business lost more than £13.4m and is dependent on its parent company — an Amsterdam holding company, Habitat BV — for its financial survival. It is thought that losses at the chain accelerated over the summer, triggering the strategic review.

According to those familiar with the situation, the Kamprad family are reluctant to put the business into administration or implement a CVA, a form of insolvency procedure, to shut some of the group’s loss-making stores. They have a record of backing the business through thick and thin since buying it from the Storehouse empire in 1992 in the depths of the last recession.

Habitat employs 1,574 people and operates in 71 stores: 35 in the UK, 26 in France, 5 in Spain and 5 in Germany. It also has an online store.

Mark Saunders, Habitat’s chief executive, was drafted in back in April from Levi Strauss where he sat on the European board.

Saunders has been leading a turnround plan designed to restore the business to profitability within three years, helped by a new marketing campaign fronted by Helena Christensen, the Danish fashion model.

It is thought that trading has improved in the past few weeks, with the business enjoying a 13% uplift in like-for-like sales. Saunders said the rise was driven by promotions: friends and family evenings, “more of the right product at the right prices” and a “better store ambience”. He said he would make the organisation “consumer-obsessed”, and is conducting a “top-to-bottom business review”.

Habitat, which had its credit insurance removed in the recession, has opened a store in Paris this year. It is planning further openings in Russia and at the Liverpool One shopping centre later this year, and Spain next year.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive