A management buyout of MFI is due to be completed today (September 29). The move follows negotiations between the furniture retailer’s management team and its owner Merchant Equity Partners (MEP).
MFI chief executive Gary Favell said yesterday that the rescue deal would be completed within 24 hours, with the buyout to be funded through “a substantial cash dowry payment” from MEP.
The retailer has been increasingly hit by a decline in sales and increased competition. Over the past 30 years, MFI had grown to become the largest furniture retailer in UK valued at £1bn. But in recent times its leadership has been challenged by other players such as Ikea and Homebase and its value fell to £742m in 2005.
“Fundamentally, it is business as usual for MFI, its employees and customers. In fact, sales in recent weeks have been ahead of plan,” Favell says.
MFI, formerly known as Mulland Furniture, was founded by Noel Lister and Donald Searle in 1964. The home furnishing service was initially started as a mail order business but opened its first shop in South London in 1967.