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Habitat delivers sales growth but still loses money

Habitat store

Habitat, now owned by J Sainsbury's delivered a double digit growth in sales for the year ended 27th February 2016, although losses grew, as a result of exceptional charges.

The furniture and homewares retailer grew total sales by 15% from £30.4m in 2015 to £34.9m, whilst gross profit also increased, up 17.3% from £11.5m to £13.5m.

The trading loss for the financial year reduced from £6.6m in 2015 to £5.6m, although due to exceptional items charge of £12.4m, overall losses grew to £18m.

This related to the impairment of Habitat brand intangibles and goodwill as a result of Wesfarmers acquisition of Homebase in February 2016, as well as costs relating to the subsequent closure programme of the 70 Habitat concessions in Homebase.

Following the sale, owner Home Retail Group, which also owns Argos, was acquired by Sainsbury’s for £1.4bn, and has already begun its store rollout through Sainsbury concessions, including its new flagship 61,000sq ft store in Nine Elms.

Sainsbury's latest new store with Habitat concession.

During 2016, Habitat invested in a new website, as well as finalising its £1.5m refurbishment of the 25,000sq ft Tottenham Court Road store, which officially opened in April.

Sainsbury’s has committed to plans to open more Habitat concessions within its stores, with five already underway, as the brand looks to grow its physical presence.

Source: Insight DIY Team

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24 November 2016

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