Habitat has been sold to Hilco in a deal that will see chief executive Mark Saunders remain in his position.

Habitat’s former owners, ICAF, which also owns Ikea, sold the loss-making furniture retailer at the weekend to Retail Investments, a specialist retail investment group led by Hilco. The deal involved ICAF writing off debts and providing working capital of €50m (£45m).

Hilco said Saunders will “lead the implementation of the management team’s plan which will secure the future of the Habitat brand”.

Saunders said: “We look forward to working with the team at Retail Investments in developing and growing the business. We have been given significant committed funds and will now be able to rapidly progress the current business plan.”

ICAF director Birger Lund said: “We are pleased with this outcome and that the Habitat brand will continue and believe that the management team is well placed to take Habitat forward. We wish Mark and the Retail Investments team every success.”

Sources close to Habitat warned last week that it would be “naïve to assume it will be business as usual” if the business was sold. It is not known if Hilco plans to close any stores or exit any of Habitat’s territories.