Page last updated at 20:13 GMT, Wednesday, 26 November 2008

Administrators called in at MFI

MFI shop
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.

Shantelle Patel
I have been waiting two months for my furniture to arrive
Shantelle Patel

'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

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".



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SEE ALSO
MFI management make buy-out deal
28 Sep 08 |  Business
MFI warns recovery will take time
17 Oct 06 |  Business
MFI sells store chain in 1 deal
22 Sep 06 |  Business

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