MFI gone into Administration Update 21.02pm 26/11

by GD Wed 26 Nov 2008, 2:21 pm

Furniture retailer MFI could be forced into administration unless the firm's store landlords agree to a rent-free period, the GMB trade union has warned.
The comments from the GMB come amid growing press reports that MFI is already looking at a possible move into administration due to financial woes.
A spokeswoman for one of MFI's landlords, former owner Galiform, confirmed it was seeking rent payments.
MFI, which saw a management buy-out in September, was unavailable for comment.
'Irresponsible'
"GMB members are asking former owner Galiform and other landlords of the 100 stores across the UK to be patient and agree to the rent-free period asked for by the management who bought the firm at the end of September," said Gary Smith, GMB National Secretary.
"The forthcoming cut in VAT may see an upsurge in business and it would be irresponsible of the landlords to put 1,000 people out of work by pushing the company into administration."
Led by chief executive Gary Favell, September's buy-out took on 110 MFI stores and more than 1,000 staff, while 81 loss-making outlets were placed in administration.
MFI has seen sales fall in recent years as it has faced increased competition from newer rivals such as Ikea.
The management buy-out bought MFI from previous owner, private equity group Merchant Equity Partners (MEP).
MEP bought the retail business for £1 in 2006 from the former MFI company, which renamed itself Galiform and maintained ownership of the manufacturing arm. (from BBC News)

by wayside Wed 26 Nov 2008, 5:58 pm

Look out for 2 other Furniture trade giants to go in the next few weeks.

by GD Wed 26 Nov 2008, 9:01 pm

Administrators called in at MFI

MFI gone into Administration Update 21.02pm 26/11 _45059705_4e250a7d-f5a0-4242-b685-690855052bc2

MFI has been hit by increased competition

Furniture retailer MFI has gone into administration - citing falling demand for big ticket items, cash-flow problems and the withdrawal of credit.
Some stores will continue to trade, but 26 will close. Existing orders will be either met or refunded, MFI said.
The GMB union had warned this was likely unless the firm's store landlords agreed to a rent-free period.
MFI's administrators told the BBC they had received two expressions of interest from potential buyers.
The firm, subject of a management buy-out in September, has 110 stores and a workforce of more than 1,000 people.
Analysts said that the downturn of the housing market was a major contributor to MFI's decline, people stopped buying things such as new bathrooms and kitchens.

MFI gone into Administration Update 21.02pm 26/11 _45244003_mfi6_bbc_226

I have been waiting two months for my furniture to arrive MFI gone into Administration Update 21.02pm 26/11 End_quote_rb

Shantelle Patel

MFI customers' views: In quotes

'Irresponsible'
MCR have been appointed as administrators, who will work to maximise returns to creditors.
"Whilst a decision has not been made as to an appropriate exit route and the future of the company, the administrators will be reviewing the possibility of a sale of some or all of the Company's stores," said MCR's Phil Duffy.
All outstanding employee wages have been paid up to date and ongoing wages for retained staff will continue to be paid he added.
MFI has seen sales fall in recent years as it has faced increased competition from newer rivals such as Ikea.

MFI FACTS
Founded in 1964 as Mullard Furniture Industries
Mullard was the maiden name of the wife of one of the co-founders
Stores sold for just £1 in 2006 to private equity firm Merchant Equity Partners
Management buyout in September takes on 110 stores
Employs more than 1,000 people

MFI gone into Administration Update 21.02pm 26/11 Inline_dashed_line

MFI: A history

The management buy-out bought MFI from its previous owner, private equity group Merchant Equity Partners (MEP).
MEP bought the retail business for £1 in 2006 from the former MFI company, which renamed itself Galiform and maintained ownership of the manufacturing arm.
The GMB union said that MFI employees would not have been surprised at the development, saying the firm had been "badly managed for some years".
But the union's Yorkshire regional secretary Tim Roache said is was "disappointing that the landlords of the shops pulled the plug and did not give the management time to turn it around". (from BBC News)

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