Home Retail Group, owner of Argos and Homebase, is understood to be in talks to buy parts of the UK operation of Habitat in a deal worth £20m-£30m.
It is thought Home Retail is in detailed discussions to acquire some of Habitat’s UK store portfolio and the rights to use the brand in Britain.
If a deal is completed, Home Retail is expected to acquire stores including Habitat’s flagship on London’s Tottenham Court Road, as well as on King’s Road.
However, at least one other retailer is competing with it to secure a deal.
It is understood French furniture chain Conforama may also be interested in buying the international parts of the chain, Retail Week has learnt.
It is thought Hilco has approached several private equity houses over recent months to offload Habitat. Sources said Hilco was also recently in discussions with Arcadia but that no deal was finalised.
Habitat is owned by Hilco, which bought it in 2009 from the family behind Ikea along with a £45m working capital dowry.