Wed, 26th November 2008

MFI calls in administrators

As many as 1,000 jobs are under threat after furniture chain MFI calls in administrators.

The Directors of MFI Group Limited, have today appointed Philip Duffy, Geoff Bouchier and Paul Clark of MCR as Joint Administrators of the Company, in order to protect the position of the Company's creditors.

The Administrators are currently working with the management of MFI in order to maximise the realisations for the Company's creditors.

It is intended that all customer orders will be either fulfilled or refunded and the Company has written to each of its customers in this regard. The Company's credit card merchant services provider is holding a substantial sum in order to fund any refunds which become payable.

All customer issues will be dealt with centrally through the call centre and not in the stores.

The administration follows the continuing pressure on the home market which has accelerated in recent weeks with sales levels falling further behind prior year levels. The company has suffered from severe cash flow pressure as a result of credit insurance being withdrawn across the sector and the general market deterioration, which has led to the failure of certain key suppliers.

In addition, the Directors have had to take the reluctant decision to close 26 stores at the request of Galiform plc. This is despite the previous agreement that the majority of landlords would support the company with a rent waiver and agreement to assignment of the leases. Phil Duffy commented "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 sale of some or all of the Company's stores. In the meantime all outstanding employee wages have been paid up to date and ongoing wages for retained staff will continue to be paid as an expense of the Administration."