Page last updated at 16:19 GMT, Thursday, 27 November 2008

Administrators review MFI orders

MFI shop
MFI has been hit by increased competition

Administrators for the collapsed furniture retailer MFI have said they are carrying out a "full review" of orders to see which can be fulfilled.

If orders are not met, the management said they intended to offer refunds to customers who paid by cash, cheque or debit card.

Credit card customers should contact their card issuer, they said.

Most of MFI's 111 stores are still trading and are in a "closing down sale state", according to a company source.

The furniture retailer was put into administration on Wednesday, citing falling demand for big ticket items, cash-flow problems and the withdrawal of credit.

Administrators MCR said that 107 of the 111 stores were still operating - though 26 are expected to close imminently.

A thousand staff at MFI were briefed by the accountants earlier on the outlook.

Current orders

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Kiranjeet Kaur

We're not happy with MFI, not at all

Kiranjeet Kaur

The administrators are hopeful that the full review of customer orders will help them decide which orders can be met.

MCR said they would contact customers as soon as it was "reasonably practical" to do so. Customers have been advised to contact the customer call centre on 0870 607 5054 or email enquiries@mfi.co.uk

Customer queries are not being dealt with in store and staff in the stores are unable to deal with refund requests, MCR said in a statement.

MFI stores remain open for the sale of display stock only and no orders are being taken.

Uncertain future

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.

"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.

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
Administrators called in at MFI
26 Nov 08 |  Business
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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