MBO RESCUES MFI FROM THREAT OF ADMINISTRATION

29th September | retail | The short term future of troubled retail chain MFI looks to have been secured after its chief executive confirmed a management buy out is to be completed today.

But in rescuing the firm it is rumoured that up to half of the ailing retailer’s 192 stores could be closed in a major rationalisation of the company’s store portfolio. The company employs about 2,500 people.

Gary Favell, MFI chief executive said the MBO would ensure the company could continue to trade after reports that it was on the cusp of entering administration, following high profile home furnishings firms Rosebys and Willis & Gambier last week.

The Furnishing Report understands MFI’s owner Merchant Equity Partners (MEP) has agreed to shell out extra funds to support the MBO after urgent talks over the past week. The news means at least one of the nation’s major furniture retailers looks to have avoided the chop on Quarter Day, when retail rents are due to be paid three months in advance. MEP famously acquired MFI for a pound in 2006.

The British Retail Consortium has called for more landlords to follow Hermes lead, which this weekend announced it would accept rents on a monthly basis.