George Kerevan: Baby boomer icon may have died but the legend lives on

BEFORE Ikea there was Habitat. Sadly, the furniture and design icon went into administration yesterday. Home Retail Group, which owns Argos, has bought the Habitat brand and its three London stores for £24.5 million. Zolfo Cooper, the restructuring specialist, has been appointed to find buyers for the remaining 30 stores.

Few of the baby boomer generation set up house without Habitat's signature Chinese paper lanterns decorating the light bulbs. What people forget is that when design guru Terence Conran opened the first Habitat store in London in 1964, it was predicated not only on selling cool and stylish products - a rarity in Britain till then - but also on being affordable. It was designer chic on a budget.

Conran floated Habitat in 1981 and used it as a vehicle to create, by acquisition, a retail empire that included Mothercare and BHS. But the group, Storehouse, proved too eclectic for him to manage. He was removed in a boardroom coup, only to reinvent himself as a restaurant owner.

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In 1992, Storehouse offloaded Habitat to Ikea. But Habitat lacked an identity under the Ikea umbrella and languished. Had Ikea only wanted to remove a competitor? In December 2009, as the recession bit, Ikea literally gave away Habitat to Hilco, another restructuring specialist, presumably to avoid being associated with the death of a British icon. Now Hilco has admitted defeat.

Why did Ikea succeed where Habitat failed? Remember, Ikea was established with only one store, just six years ahead of Habitat.

Trapped in expensive, high street locations with limited space, Habitat could never emulate Ikea with its cheap, suburban warehouses. In the Eighties, Conran had the right idea of taking affordable, good design into big high street stores such as BHS, but he fumbled the transition. He should have closed the original Habitat shops immediately and put their operation into the BHS outlets under the Habitat brand.

The lesson of this latest twist in the Habitat saga is that the outlook is still chilly for Britain's retailers. Yet to change that, we need more visionaries like Terence Conran.

Commodities surge may be slowing but for how long?

HAS the global bull market in commodities finally come to an end? This week saw a thumping fall in the price of oil, following the decision by the US to open the spigots of its 727 billion barrel strategic petroleum reserve. But oil was not the only commodity on the slide.

The Reuters-Jeffries index, a composite that tracks all the main traded commodities, peaked in April. Since then it has dropped by 10 per cent. Thursday's oil price drop was mirrored by a fall in other commodities, including corn, platinum and copper. Silver crashed 12 per cent.

The world's hedge fund managers, meeting this week in Monaco, took the hint. Their consensus is that the commodities bull market - driven by growth in the emerging economies and cheap money in the old industrial ones - has run its course. The Chinese and Indians are worrying about inflation and moving to curb investment while the US and UK are withdrawing from quantitative easing. The hedge funds should know. They've lost money on commodities this month - their first since August.

Certainly, there has been increasing volatility in commodity prices in the past two months. But I'm not ready to call it quits yet. For a start, the fall in oil prices has been engineered deliberately by the western economies in a move that is likely to backfire.

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In the past, the US only released oil from its strategic stocks in times of political crisis and acute shortage; eg. after Hurricane Katrina.

This week, the intention was clearly about manipulating the market - a first. This is the start of the summer driving season in America, and President Obama wants to boost a flagging economy. There's a presidential election, don't ya know?

But the move has undermined America's ally Saudi Arabia by reducing Riyadh's bargaining power (as swing producer) with the other Opec states. Result: an increasingly truculent Opec, combined with market uncertainty over the use of US oil stocks to fiddle prices. That's a scenario that spells more commodities speculation, not less. Throw in the Greek crisis threatening European growth, and who'd bet on equities just yet?

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