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Last Updated: Friday, 22 September 2006, 07:33 GMT 08:33 UK
MFI sells store chain in 1 deal
MFI sign
MFI has closed 13 sites since the start of 2006
Furniture business MFI has agreed to sell its loss-making retail arm to a private equity group for 1.

Under the deal, Merchant Equity Partners (MEP) will take control of the 200-store chain while MFI will continue to supply the stores.

MFI said it planned to change the name of the rest of the group to Galiform.

The company will hold an extraordinary meeting in October to vote on the sale, which is expected be to completed later in the month.

MFI said it would pay MEP 53.1m next year and 12m in 2008 if the new owners match the investment.

Chief executive Matthew Ingle said the group had explored various options for the retail business, but had decided a sale was in the best interests of shareholders.

New focus

The deal will leave MFI able to concentrate on its profitable Howden Joinery trade business and its loss-making furniture manufacturing operation.

Howden made a profit of 51m in the first six months of the year. Its earnings have helped to offset problems with the group's other businesses in recent years.

The company hopes to expand the 320-strong chain of Howden depots to 500 by 2010.

MFI's manufacturing operations are struggling, losing 25m in the six months to 10 June.

It has closed a number of UK factories as it looks to source more products from overseas.


SEE ALSO
MFI close to sale of retail arm
18 Sep 06 |  Business
MFI in talks over retail arm sale
17 Aug 06 |  Business
MFI shares plunge after 45m loss
20 Jul 06 |  Business
323 jobs set to go at sofa plant
28 May 06 |  South East Wales
MFI 'has offers for its business'
19 May 06 |  Business
MFI revamp threatens 1,500 jobs
28 Feb 06 |  Business

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