Habitat's Swedish owners, the family of Ingvar Kamprad, the billionaire founder of the Ikea chain, have been forced to review the future of the contemporary furniture company over rising financial losses.

Saunders, who was appointed Chief Executive six months ago to revive the business, said the retailer had launched a review, "which may or may not lead to a sale of the company".

Investment bankers, Lazard, have been brought in to assess a number of options, ranging from sale to break-up.

Ironically, the effect of the recession has meant that the success of Ikea has hit retailers such as Habitat hard. Consumers have been found to increasingly go for for flat-pack options, as opposed to furniture.

However, Saunders said that "no decision has been made yet" and that his "focus is to continue giving great service to our customers".

He added that "the launch of a number of new stores over the next few months in the UK and Europe, such as Liverpool," will be going ahead.

Edited by Ellie Duncan