Fears for jobs at beleaguered MFI
Saturday 18 October 2008
Fears are growing for about 1,000 jobs at MFI, the beleaguered furniture retailer, which collapsed into administration earlier this month.
The administrator Kroll has so far not been able to find a buyer for the remaining 81 of its 187 stores that were not saved as part of a management buy-out (MBO) at the time of the administration. MFI was been hit badly by the sharp downturn in sales of big ticket items, as the deteriorating housing market and economy stops people spending on their homes.
Kroll declined to comment on the scale of the potential redundancies. But Fraser Gray, Kroll's corporate advisory and restructuring group partner, said: “At this stage, we have not been able to complete sales of the remaining stores. Therefore, in order to maximise the realisation of assets, a wind-down process has commenced while we continue to seek purchasers for those remaining stores.”
He added, “all employees have been made aware of the situation”. It is understood that the redundancy axe could fell on nearly 1,000 MFI staff next week. In addition, MFI made more than 130 staff redundant last week, as it closed its call centre in Sunderland.
The MBO, led by MFI's chief executive Gary Favell, saved 106 stores and 1,350 jobs under a new company, MFI Group.
Other furniture retailers, including Ilva and ScS, which subsequently came out of administration, as well as the home furnishings retailer Rosebys, have hit the buffers this year.
The administrators of Rosebys said it had cut a further 173 jobs this week, as more stores were shut.
KPMG closed a further 32 stores, bringing the total so far to 73.
Last week, KPMG administrators closed 31 Rosebys shops with the loss of 186 jobs. Previously, it had closed10 stores and made 60 people redundant, as well as another 32 jobs axed from the company's head offices in Rotherham, South Yorkshire.
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