MFI urged to axe half its stores

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Beside its full-year results on Tuesday, its chief executive, Matthew Ingle, will unveil plans to turn the struggling retailer around. He is expected to announce the closure of 20 outlets.

But investors are understood to want more. "They have to make some serious cuts," said a City insider. "They have lost market share and it's hard to see them regaining it, so they need to be smaller."

Mr Ingle has already sold a French business, Hygena Cuisines, for £92m, rearranged banking facilities and settled a dispute with Revenue & Customs. MFI had paid the authorities £60.5m and £21.8m will now be returned to the company.

A shareholder noted: "The point of getting rid of [Hygena Cuisines] and the banking facilities sorted was to get the balance sheet in better shape." He argued that the cash could pay for a "radical" overhaul of the property portfolio.

The results, which will include a £38.7m write-down, are also likely to show a 20 per cent slump in underlying sales.

Nick Bubb, a retail analyst at EVO Securities, said: "The key is that radical action is needed to make a significant reduction in the huge losses at MFI Retail, and we suspect that closing or selling up to half the near-200- store chain may be necessary."

Howden Joinery, MFI's profitable trade business, has also been the subject of speculation. "The previous chief executive talked about the impossibility of separating retail from Howden, but the new one pooh-poohed that - said it could be easy to do," the shareholder added.