If it’s Broke, Fix it, But Not Too Much

There was once a homewares retailer called Habitat in the U.K. It flourished for upwards of 40 years after its foundation in the late ’60s. Then, in 2011, it went bust. It was actually rescued, but only three of its 33 stores survived and the great majority of those that disappeared were very large.

In 2015, there are still just three standalone stores, but there are as many as 80 mini-Habitats housed within diy retailer Homebase. The deal is something like this: Homebase is the number two “home improvement” retailer in the U.K. and it’s had a pretty tough time over the last five years or so. It has, however, bought the Habitat name and the three stores that remain, while using the brand’s remaining equity to create shop-in-shops across parts of its estate.

The manner in which it has done the latter is the point, however. Rather than trying to impose any kind of restriction on the look and feel of the in-store spaces (other than the size involved), it has allowed the Habitat management free rein to do its own thing.

The outcome gives the sense that you’re in a Habitat-within-a-Homebase, as if you have left the host store and have entered a completely different shop. And here’s the interesting part in all of this: Habitat is resurgent, and the contribution that it makes to the Homebase bottom line is significantly above expectations. Everybody appears to be happy.

It would have been very tempting in a setup of this kind for Homebase to tailor Habitat to its current format, but this has been studiously avoided. And the lesson in all of this is that if there is a brand that has fallen on hard times, it may be less to do with the stores and the format, and rather, more to do with the operational cost of doing business. At least, this is the view that Homebase has taken, and it seems to be working.

John Ryan is a journalist covering the retail sector, a role he has fulfilled for more than a decade. As well as being the European Editor of VMSD magazine, he writes for a broad range of publications in the U.K., the U.S. and Germany with a focus on in-store marketing, display and layout, as well as the business of store architecture and design. In a previous life, he was a buyer for C&A, based in London and then Düsseldorf, Germany. He lives and works in London.