Newspaper article The Evening Standard (London, England)

MFI [Pounds Sterling]45m in the Red as Furniture Sales Collapse; CITY BRIEFING

Newspaper article The Evening Standard (London, England)

MFI [Pounds Sterling]45m in the Red as Furniture Sales Collapse; CITY BRIEFING

Article excerpt

Byline: ROBERT MILLER

TROUBLED furniture stores group and joinery supplier MFI has seen another sales wipeout at its upforgrabs retail division.

The company, which today confirmed it was still in talks over selling the 200-strong chain, said that sales at the division collapsed 25% in the half-year to 10 June, prompting a loss for the operation of [pounds sterling]14.2 million compared with one of [pounds sterling]300,000 this time last year.

Chief executive Matthew Ingle said: "We have received expressions of interest in the business, and that is a process that is still going on. When we know what's on table, then we can evaluate the offer against our own plans."

Former Deutsche Bank veteran Henry Jackson is tipped to win the bidding race through his Merchant Equity vehicle, which includes US investment bank Goldman Sachs and hedge fund Cerebus.

Meanwhile, Ingle pointed to the more successful Howden Joinery trade division, where profits were [pounds sterling]50.9 million against [pounds sterling]51.5 million a year ago despite fewer discounts and spending on a store opening programme.

"We said we would open 40 new stores this current year and we're already halfway to that target," Ingle said. "There is a fundamental shift going on in the business away from DIY to having it done for you."

The MFI boss, who also announced that overall group losses for the period were [pounds sterling]45 million against a [pounds sterling]57 million profit a year earlier, admitted that turning round the company's fortune is "taking longer than we thought".

However, he added: "We are well into our turnaround plan even if it is a long road ahead."

MFI, which will not pay an interim dividend, stopped trading in 13 retail locations since the start of the year with three regional home delivery centres closed.

Its factory operation in Stockton and Scunthorpe also shut down, incurring an after-tax cost of [pounds sterling]22. …

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