Trouble on the high street

THE Harrogate high street was dealt a hammer blow this week with five household names becoming the latest victims of the squeeze in consumer spending.

Habitat, Thorntons and the Homeform Group, which owns Moben Kitchens, Kitchens Direct, Dolphin Bathrooms and Sharps Beds, have gone into administration with thousands of jobs nationwide set to be lost.

Ladies clothing firm Jane Norman, which has a branch in Sunwin House, could be set to join them. A deal this week with retailer Edinburgh Woollen Mill rescued a third of branches, saving 396 jobs, but it is not yet known if Harrogate is among them.

Meanwhile Carpetright, the UK’s biggest floor coverings retailer, which has a store on the Plumpton Park trading estate, also announced store closures.

An employee at Harrogate’s Habitat store, who wished to remain anonymous, said staff morale was at rock bottom.

“Everyone is negative at the moment because of the bombshell that has just happened.”

“No-one told us about it. We found out by reading the papers and by people coming into the store talking.

“We are definitely going. But we don’t know how long we have got, it could be weeks, it could be months.”

The troubled furniture store was put into administration last Friday with 30 of its stores to close across the country.

Home Retail Group, owner of Argos and Homebase, will buy the Habitat brand and three central London stores for £24.5m.

It will keep 150 staff at its London stores but the future of its other 750 employees remains uncertain.

The Harrogate Advertiser understands if administrators find a suitable buyer then Habitat’s current employees will be given first option to apply for jobs at the store.

If not the store will be sold and all jobs lost.

Zolfo Cooper, the firm appointed as administrator, said it would assess all possible options for the group and keep the stores open while it tries to find buyers.

Meanwhile Thorntons will close between 120 and 180 with 1,100 jobs at risk.

A spokesman for the chocolatier said: “Due to the sensitive nature of the store closure plan, we are not providing detailed information at this stage on the location of any potential store closures.”

Carpetright, which has issued three profit warnings this year, posted an expected 40 per cent slump in 2010-11 profit and said it would not pay a final dividend. It made an underlying pre-tax profit of £16.9m in the year to April 30.

The group is to focus on “self-help measures” to improve its performance, including vacating up to 75 UK stores as leases expire over the next two years, downsizing its Ireland operations, expanding its bed business and developing its website.

Nearly 3,000 jobs are at risk after the Homeform Group also announced it will enter administration. Almost 1,300 staff in 160 showrooms and 1,500 fitters and designers could lose their jobs.

A spokesman said at present, the Homeform Group remains under the control of its directors adding: “The directors are close to securing a deal that will safeguard the future of the Sharps (Bedrooms) and Kitchen Direct businesses and have mandated advisers to seek a sale of the Moben and Dolphin brands.”