Magazine article Marketing

ANALYSIS: Makeover Pays off for MFI as Profits Soar

Magazine article Marketing

ANALYSIS: Makeover Pays off for MFI as Profits Soar

Article excerpt

Refurbished stores and a celebrity-led campaign have been key to reviving MFI, says Mark Kleinman.

MFI, the once-derided furniture retailer, has achieved a brand makeover worthy of Skoda. Just a few years ago it was in trouble. Represented by tired stores and languid advertising, it was heading nowhere fast. The average shopper's verdict on the company would have included the words 'unfashionable', 'dour' and 'flat-pack'. The joke was that MFI stood for 'Made for Idiots'.

But such pejorative terms can no longer be hurled in MFI's direction.

Two weeks ago, the company confirmed that its revival is well and truly on-track with a set of interim results far in advance of most of the UK's other leading retailers. Pre-tax profits rocketed 28% to pounds 59.3m and group turnover 17% to pounds 709m. This compares with a retail sector average of a 4.4% rise in sales.

It is a remarkable turnaround, one retail analysts are hailing as a model example of how a major store chain can reinvent itself in the eyes of the public. The results were especially impressive since they included the period covered by the war in Iraq, when traffic in stores fell by as much as 20%.

Last week, MFI further strengthened its focus on marketing with the appointment of experienced retailer Steven Round as its commercial chief (Marketing, 31 July).

Round, a former Superdrug, Woolworths and Kwik Save executive, joins a team including former Mars marketer Mark Horgan, promoted to executive director of MFI UK earlier this year.

Redesigned interiors

Chief among the innovations behind MFI's renaissance - led by Horgan and chief executive John Hancock - has been the roll-out of a redesigned store format, inspired by Conran Design Group. Reformatted stores have typically seem 25% sales uplifts.

So far, about 100 stores out of 190 have been refurbished, with a further 50 being revamped.

MFI hopes that 75% of its turnover will be derived from the reformatted stores by the end of the year.

Another key development in its rebranding has been repositioning MFI as a chain selling 'whole-room solutions' according to Round. Typically known as a kitchen and home office supplier, the company has added upholstery (buoyed by the acquisition of Sofa Workshop) and bathrooms to its repertoire.

'The company has been extremely successful in its strategy and the marketing and commercial strategy going forward has to be to build on these foundations,' says Round. …

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