It shouldn’t surprise anyone that a retailer as well-loved as Habitat managed to bounce back from administration. At 51, there’s plenty of life left in the brand – but its recovery has not been without its challenges. Paul Farley visited Habitat’s head office in Farringdon to talk to MD Clare Askem about new directions and old loyalties …
Although she describes herself as a “Habitat shopper” from as far back as her college years, it wasn’t until Clare Askem left university that she was able to afford an article of furniture.
“I can remember that I wanted it for quite a long time and saved a lot of money for it,” says Clare. “I can also remember that it was far too big for my pokey one-bedroom flat in East London!” Despite its size and weight, Clare’s black ash display unit was her “pride and joy”, and accompanied her through several moves.
Habitat’s appeal transcends generations. In 1964, founder Terence Conran unveiled a new, fashion-driven retail model, influenced by Europe’s modern business leaders. As time went by, Habitat literally became a household name – affordable yet edgy, the brand attracted greater numbers of loyal followers, evolving constantly to meet consumer demand.
Yet by June 2011, it was clear that it had not evolved enough. The economic pressures of the moment proved too much for the over-stretched retailer, which entered administration.
“Through a succession of owners and management over an extended period of time, I think they had moved a long way from the original customer proposition,” says Clare. “What made Habitat fantastic was the brand values and the product proposition that went with it, and I think it had become a little disjointed by 2011.
“From the customer’s point of view, going into a store resulted in quite a muddled experience – it was too expensive, and the price architecture was all wrong. Commercially, there were a lot of very expensive stores which, at that difficult time in the economic cycle, couldn’t make enough money. I guess that the combination of those things meant it became an unviable business – but not an unviable brand.”
Recognising its value, Home Retail Group, owner of Argos and Homebase, bought Habitat’s UK arm – taking full ownership of it six months later, and installing retail development specialist and long-term fan Clare at its helm.
“Like lots of Habitat customers, I’d watched the development of the brand, and was a little saddened by the 2010/11 stage,” she says. “Although it was a commercial project, from a personal point of view it was one I was very passionate about – to be part of Habitat’s resurrection was a great opportunity.”
Thus far, Habitat’s revival has taken place across several retail channels: the three London flagship stores which were maintained as going concerns; the website; via Argos; and the Mini Habitat concession stores, located within the parent group’s Homebase stores.
“Now I feel that wherever I access the brand – in printed material, the website, a big store or little concession – it is one Habitat, a joined-up brand, and the brand I think it should be”
The years since the acquisition have seen the brand recover at a prodigious rate, most notably through the rollout of the concessions, which, as of April, totalled 38, including a larger-format “concept” store in Chichester. Habitat celebrated its 50th birthday last year, and has just embarked upon a substantial marketing campaign which includes its first television advertisements.
“We couldn’t do TV ads right from day one because we weren’t sure that the customer experience was up to scratch,” says Clare. “We’re now in a place where we believe we can be loud and proud about the brand, because when people do engage with us, wherever and however they might do so, they’re going to find great product, great prices and a great brand experience.”
It’s difficult to pinpoint what this “brand experience” is, exactly. “We’re cool, intelligent and fun, enduring and affordable,” says Clare, “and there’s a lot of warmth for us because something like 85% of our products are designed in-house. But we’re not for everybody – we aren’t trying to be all things to all people.”
The Chichester concept store certainly evokes the progressive mindset of the brand’s founder. The 5600 sqft space is clean, colourful and modern, featuring over 1300 SKUs and greater technological deployment than any Habitat store yet. It’s a bold experiment, toying with numerous variables including layout, scale, lighting and use of space in an effort to refine the concession model.
“Chichester is quite a step change in our development,” says Clare. “We know that 2000 sqft is a good standard size for our concessions, and Chichester is more than double that – we’ll live with it for a while, and won’t open another big one until we’ve learned from it.
“We’re also using touch-screen technology to show our complete range, and we’re monitoring how the customer gets on with that. Typically, our sales staff will use iPads, and will sit down with a customer and go through the options. This new approach is a self-serve mechanism – we want to see how customers prefer to engage.”
In some ways, the Chichester concept represents a halfway house between the Mini Habitat concessions – which are only large enough to accommodate around 1000 SKUs – and the big London flagship stores. None of the various bricks-and-mortar outlets are able to convey Habitat’s full 4000-plus portfolio, so providing a seamless journey between its website and in-store experience is vital.
“There’s nothing like walking into a 40,000 sqft showroom,” says Clare. “In the London stores you can see all the pieces in a bedroom furniture range – the bed, chests of drawers, wardrobe … whereas in a Mini Habitat, you might only see the bedside cabinet on display. So, you can touch and feel it, see how it’s made, inspect the colour of the finish, and get a sense of the product – but that’s all.
“Of course it’s a lot more magical to stand in the middle of a whole room set than it is to only look at one piece of the range, but it’s something physical nonetheless, and can give a customer the confidence to purchase a similar model online. For our customer, it’s a multichannel journey – in fact, the website is really our home, and a huge number of our customers begin their journey there.”
Shifting focus to the online channel – which, Clare admits, was “a very small part of the business, and a bit behind the curve in terms of its development” prior to the events of 2011 – has been essential to Habitat’s survival.
“Habitat used to have around 35 big standalone furniture stores, and personally I can’t see a future where you’d go back to that model,” says Clare. “I don’t think that the retail landscape – the rent, the rates, the overheads – would allow it.
“For us, the website is absolutely crucial. It’s where the brand should live and breathe. In fact, it’s the easiest place to access any brand – therefore it’s got to be a lot more than just a transactional website. It should be bringing the full Habitat experience to life – visitors should be able to find blog posts and insights, follow our buyers on a trip, see lots of lovely photography, and post what they’ve done with their own products. There should be a real community. And, obviously, as well as that, they should be able to buy product.”
Habitat is in the process of re-platforming its website, so that it can deliver a fuller online experience. The fact that its new parent company boasts “vast expertise at the frontier of that digital space” means it shouldn’t be long before Clare’s aspirations are realised.
The Home Retail Group’s strengths have proved invaluable throughout the brand’s recovery. From the outset, the group’s extensive distribution, customer service and IT infrastructures have allowed Habitat breathing space to focus its core brand values, and adjust its product portfolio and price architecture. “We had to make sure there was an affordable layer to our offer, that we had entry-level options across all our ranges,” says Clare.
Perhaps most helpful has been the ability to simply slot concessions into the group’s existing Homebase stores, avoiding the bulk of the overheads. “Home Retail Group has a market-leading infrastructure, and one of the best distribution systems in retail – as a small brand, being able to plug into that is quite exciting,” says Clare. “The synergy is brilliant – Homebase is a great fit for us. Fundamentally, their stores attract a reasonably similar customer demographic, if slightly older.”
Last year, Home Retail Group announced its intention to close 25% of its Homebase stores by 2019. Clare asserts that the likely impact on Habitat will be minimal: “My understanding is that they plan to close some stores in peripheral locations, which we would not have considered opening concessions in.
“We’re looking for host stores where you might find Habitat-like customers. In the same way as department store and fashion concessions, the host retailer provides a big chunk of the traffic coming through the door, so it’s the catchment which matters to us. Homebase have a much bigger estate than we would be able to go into – they will have stores in locations that wouldn’t be a good fit for Habitat.”
This year will see Habitat roll out further concessions in urban hotspots across the country, often in response to local demand, evinced by concentrated web orders and social media activity.
“We recently opened in Hove,” says Clare. “We used to have a big store in Brighton and were forever getting posts and tweets asking when we were planning to re-open. Now we can’t keep up with the demand – the store manager can’t stock the shelves fast enough!
“There are obvious places where there are clusters of Habitat shoppers who might want to shop locally, but we can’t always get a perfect match between where we’d like to be and where there’s a suitable Homebase store – we’ll have to think of other ways to get into those catchments.”
Clare has been encouraged by the ease with which Habitat has re-engaged with its fans, many of which had drifted away from the brand in the years leading up to its administration.
She says: “Like lots of Habitat customers, I’d watched the development of the brand through the years, and was a little saddened by what it had become by 2010 – but when I took over, I discovered that there was a real warmth for the brand. That warmth is because people want to engage with the Habitat way of life – it’s about much more than product – and our creative team have been massively instrumental in reiterating and communicating our core values.
“Although it was a commercial project, from a personal point of view it was one I was very passionate about – to be part of Habitat’s resurrection was a great opportunity”
“Life has moved on in terms of how customers are willing to engage – particularly our customers, who are more techno-savvy, at the younger end of the spectrum. We’re a brand they’re willing to engage with, and they trust us and feel confident in the quality they’re going to receive.”
And it isn’t just the loyalty of customers that has ensured Habitat’s survival.
“The administration was a very uncertain time for many people, including our suppliers. One of Habitat’s great strengths was always its supplier base – a lot of them had been working with the brand for a really long time. An administration is very painful for suppliers – they lose money, and feel, rightly so, a bit bruised. We were lucky – they proved fantastically supportive, and there was a lot of willingness to help us. We couldn’t have done it without them.”
Habitat has come a long way since then. With the opening of each new concession, its customer base grows. Some of these customers have waited patiently for the chance to buy Habitat goods locally. Some are content to buy online, regardless. Others might not have been aware that Habitat even existed any more.
No matter the route to market, it’s impossible to deny the enduring value of Terence Conran’s retail concept, which, 51 years on, continues to embody a unique blend of heritage and innovation.
“I feel that we are now true to our brand values,” says Clare. “As a passionate Habitat person, I felt that it was quite a long way adrift, but now I feel that wherever I access the brand – in printed material, the website, a big store or little concession – it is one Habitat, a joined-up brand, and the brand I think it should be. It’s much bigger than just product and prices.
“I didn’t really have a management team at all at the time of the administration. When we moved into this office on 23rd December 2011, we had no furniture, no internet connection, and about 40 people. Today, there’s just under 400 in total. Every member of the team has a shared view of what we’re trying to achieve, and is relentlessly positive about our ability to deliver it.
“As a small business with limited resources – which we were, for a time – you can feel too often like you finally get to the top of a hill, then you look up, and see another hill. It’s constantly challenging. I wouldn’t get up in the morning and come to work if I didn’t have a team of people that shared my vision, and I’m extremely proud of how we are bringing the Habitat brand to life across so many different touch points.
“Thankfully, Habitat still has a great reputation – it just got a bit tarnished and needed polishing.”
This article was featured in the July issue of Furniture News magazine.