An announcement issued as the stock market closed said that John Randall had resigned as chief executive with immediate effect, following a warning that group sales in the second half are currently 14 per cent below last year. He is being replaced by John Hancock, the head of WH Smith's businesses in America and an MFI non-executive.
The departure of Mr Randall, 53, ends a 20-year career with the company which saw him net a fortune from the management buyout of the business in 1987 and its subsequent flotation in 1992. He leaves with a payoff of pounds 300,000, the equivalent to one year's pay. Derek Hunt, who was due to retire as chairman later this year, will now stay on to oversee the integration of the new chief executive.
John Hancock, who was a candidate for the chief executive job at WH Smith taken by Richard Handover, played tribute to Mr Randall's contribution at MFI. But he said the board had unanimously decided a change was needed: "The company needed a new pair of eyes," he said.
The latest warning will fuel the takeover speculation surrounding MFI. It announced interim losses of pounds 26m in December following heavy re-structuring charges. The company has been closing in-store warehouses and moving to a central distribution system.