MFI head steps down as sales dive

The slowdown in consumer spending has hit MFI hard

The chief executive of furniture retailer MFI has left the firm after it unveiled another slump in sales.

MFI said chief executive John Hancock would leave immediately and be replaced by Matthew Ingle, the managing director of the firm's Howden joinery business.

In the past month, the company's UK retail net orders were down 31% against a year ago, and MFI is now set to record a small annual loss.

MFI's shares fell more than 8% after it revealed the decline in sales.

Its shares closed 9 pence, or 8.2%, lower at 99.75p.

'Volatile market'

MFI has been hit by slowdowns in both retail spending and the housing market.

Last week, the CBI said that retailers remained "mired in difficulty" after it found sales were falling at the fastest rate since the business group began its retail survey 22 years ago.

It added that prospects for October were "equally gloomy".

In a trading update last month, MFI said that orders in its UK stores had fallen by 15% since the start of the second half of its financial year.

I am urgently reviewing the strategy of the group and I am determined to improve performance Matthew Ingle, MFI's new chief executive See MFI's share price

However, in the latest update, MFI said trading had "deteriorated further in a volatile market place", and UK retail sales were now down 31% on both a total and same-store basis.

However, MFI added that both its Howden joinery business and its Hygena Cuisines French retail business "continue to perform well".

"This is fundamentally a good business," said incoming chief executive Matthew Ingle.

"My immediate concern is to maintain the strong momentum of Howden and improve the performance of UK Retail," he added.

"I am urgently reviewing the strategy of the group and I am determined to improve performance."

Finance

MFI said that it was not in breach of any banking covenant, but added that "in the light of the deterioration of retail trading conditions" it was in talks with its lenders regarding future arrangements.

"These discussions are constructive and the board expects good progress to be made," the company said.

MFI said that if the sales trends for the past few weeks were to carry on for the rest of the year, it would expect to report a small annual loss.