It shaped interior design and became the embodiment of the middle-class aspirations of the baby boom generation — and yesterday Habitat was put up for sale by its Swedish owners, plunging the chain founded in 1964 by Sir Terence Conran into a period of uncertainty.

The Kamprad family, who own Ikea, have hired Lazard, the investment bank, to conduct a strategic review of the loss-making retailer, which has been hit hard by the housing market slowdown and the recession.

It also emerged yesterday that the Kamprad family and Mark Saunders, the chief executive of Habitat, had turned to Sir Terence for advice on restoring the company to its former glory.

Sir Terence said: “Obviously, I still remain very attached to Habitat. I’m proud of having created it. Sadly, I’m not proud when I see the sort of mess it’s in at the moment.”

Habitat made a £13.4 million loss in the year to March 30, according to the latest available accounts.

The business is controlled by Ikano Group, which was spun-off from the rest of the Ikea Group by Ingvar Kamprad, the founder, in the late 1980s. Mr Kamprad bought Habitat during the last recession, in 1992, when it was offloaded by Storehouse Group, the ailing conglomerate that had been built up by Sir Terence during the 1980s.

Sir Terence, who founded the company from a single store in London’s Fulham Road in time to usher in the Swinging Sixties, said: “I was asked by one of the sons of Kamprad family a couple of months ago what I thought was missing. I said I thought charm and humour were missing, which always seemed to me important.”

Sir Terence expanded Habitat and acquired Mothercare and British Home Stores (now Bhs), forming the Storehouse Group. The company hit hard times in the late 1980s.

Mr Saunders said that he was seeing early success in turning around Habitat’s fortunes. He added that like-for-like sales had risen 13 per cent in recent weeks at Habitat’s 71 stores — 35 of which are in Britain. Trade credit insurance to its suppliers had been removed because of fears over its long-term future, which pushed up costs.

Sir Terence said: “I just said to Mark Saunders, anything I can do to help, of course I would be happy to do so.”

Sir Terence, 77, said of his talks with Mr Kamprad about Habitat: “I said I thought he ought to spend more money on the service. It was so incredibly profitable. Most people come away feeling a bit fed up with the way they had been treated.

“He said ... ‘Price is singly the most important thing to me and you know I don’t want to consider anything that puts the price up.’ ”

Sir Terence said that the present Habitat management had been attracted by The Conran Shop — his design-focused furniture and lighting store. “They see in The Conran Shop lots of qualities they would like to have [in Habitat],” he said.

He believes that Habitat must regain some of the lustre that it had in the early 1990s, after its purchase by the Kamprads, when it was run by Vittorio Radice, who later ran Selfridges, the upmarket department store.

“[Habitat is] a good brand that’s not suffered from underfunding but suffered from management that hasn’t had a clear idea of what to focus on. The last time it made money was when Vittorio Radice was running it before he went to Selfridges ... He sprinkles stardust. That’s what it needs: a bit of stardust.”

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