MFI

MFI said it was replacing chief executive John Hancock with Mathew Ingle, the managing director of its kitchen wholesale wing Howden. The furniture firm had been hit hard by the slowdown in consumer spending and a slump in the housing market and expected to post a small annual loss. MFI said declining sales had made the company expect its third annual loss in four years. Net retail orders had dropped 31% against a year ago and orders had fallen by as much as 15% since the start of the second half of the financial year.

The firm expects new chief Ingle to review the group’s strategy and repeat his performance at Howden Joinery unit. He is credited with the impressive growth of Howden’s business in just five years. Howden’s operating profits ascended from £9 million in 1999 to £100 million in 2004. He joined the firm in 1995 as managing director. The retailer’s stock value has dropped 30% in the last 7 months as business took a downturn following a series of interest rate hikes which made consumers tighten their belts. The firm also rubbished recent reports that said it had breached its banking covenants. (Source: ABC Money, Oct/05)

MFI is planning the closure of up to 20 stores threatening hundreds of jobs. The move is part of an overhaul of the business which will also see a dramatic shift up-market with the launch of a new kitchen chain and the sale of Sofa Workshop. MFI was also said to be considering pulling out of the bathroom market altogether after sales slumped 40% in recent months.

It is thought that the measures will be announced by chief executive Matthew Ingle as part of his strategic review of the company, which has faced plunging sales across nearly all its divisions. It is believed that MFI is testing the new upmarket kitchen store in a secret warehouse in Doncaster.

The concept, thought to be called Dreamworks, will sell kitchens in the £8,000 to £12,000 range, which is well above MFI's current price range. MFI recently sold its French kitchens Hygena Cuisines to Nobia for £92 million. (Source: Mail on Sunday, Feb/06)

Around 1,500 workers face losing their jobs after MFI prepared to close 11 stores. The company revealed it also plans to outsource more of its manufacturing operations. New chief executive Matthew Ingle announced the changes as the company revealed its trading difficulties had forced it into the red in 2005. MFI said around 930 jobs could go with the proposed closure of its Stockton-on-Tees and Scunthorpe factories.

Another 128 are threatened at its Howden UK joinery business near Hull as MFI aims to source 75% of products from abroad by the end of 2006, saving £12million a year. It will also close at least 11 of its 215 stores, costing another 95 jobs, while a further 180 jobs are threatened by the proposed closure of three regional home delivery centres, at Aldershot, Glasgow and Nottingham. (Source: The Sun, Feb/06)