FURNITURE RETAILER Habitat has closed its shops in Dublin and Galway due to a "severe" deterioration in sales. The company, which has a big exposure to the decline of the new homes market, is the first major retail casualty of the economic downturn.
More than 60 full-time and part-time staff lost their jobs last night when the company that runs the business, Conai Designs (Ireland), applied for a voluntary liquidation. Well-known for minimalist and colourful designs, the chain occupied a prominent store in Dublin linking Dame Street and Suffolk Street, and had an outlet in central Galway.
The business closed at 5pm yesterday after a rescue plan collapsed. "Due to a severe downturn in sales in our Galway and Dublin stores, it has become impossible to trade through the subsequent financial difficulties, particularly in light of the current economic environment," the company said.
Staff were called to a meeting last evening, at which they were told the stores will not re-open today.
"They told us it is finished," said one employee, who declined to be named. "They said they had been meeting with the bank for about a month but they could not get any money."
Only a few customers browsed at lunchtime yesterday in the Dublin store, where much of the stock was discounted by 30 to 50 per cent.
The business is owned by retailer Malcolm Brighton, a Londoner who acquired Habitat's Irish franchise in 2002 from the foundation that owns the commercial interests of Ikea-founder Ingvar Kamprad and his family.
"We are working closely with Habitat UK Ltd to determine the extent to which customers will be affected by this unfortunate situation, and Habitat UK Ltd will be investigating all options available.
"We deeply regret any inconvenience that this may cause to our customers and we appreciate their patience and understanding at this difficult time," said the firm.
Conai Designs, which reported a pretax loss of €33,645 in the year to March 2007, is understood to have attributed its difficulties to "slow sales and high costs".
The Dublin store, refurbished in 2005 at a cost of €2.5 million, commands an annual rent of some €1.3 million for Clarendon Properties, a firm in which developer Paddy McKillen is a big investor.
Conai Designs said any customer with an outstanding order will be formally notified in due course.
It added that any provisional orders placed for which no payment has been taken "will now not be processed and any payment details destroyed".
It provided two e-mail addresses for customers with enquiries: customerenquiries.Ireland@habitat.co.uk and info@habitat.ie