The furniture and homewares shops, in Dublin and Galway, both ceased trading last Friday.
Habitat’s franchise partner Conai Designs (Ireland), which has applied for voluntary liquidation, said in a statement: “Due to a severe downturn in sales in both our Galway and Dublin stores, it has become impossible to trade through the subsequent financial difficulties – particularly in light of the current economic environment.”
Conai Designs, which is run by retailer Malcolm Brighton, had worked with Habitat for six years.
Habitat UK said: “We are working closely with Conai Designs to determine the extent to which customers will be affected by this unfortunate situation and are investigating with them all options available.”
It was unclear as Retail Week went to press whether Habitat UK would seek to reopen its Dublin and Galway stores with another franchise partner. The retailer also has a store in Belfast, which is operated by Conai Designs (Northern Ireland).
Habitat UK has set up an e-mail enquiries service for customers who have placed orders with Conai Designs.
Retail consultant Richard Hyman said that Habitat is a strong brand, although big-ticket items are the first to be cut in a downturn and that may make the brand vulnerable.
“Habitat has calved out a niche for itself, so it should be more resilient, but the Irish economy is bound to be suffering in the same way it is in the UK,” he said.