Two MFI directors ousted after computer bungle - Business News - Business - The Independent

Two MFI directors ousted after computer bungle

Two board directors at MFI paid for last week's disastrous profit warning with their jobs yesterday, agreeing to leave the company "by mutual consent".

Two board directors at MFI paid for last week's disastrous profit warning with their jobs yesterday, agreeing to leave the company "by mutual consent".

Martin Clifford-King, the finance director, and Gordon MacDonald, in charge of the company's supply chain, were relieved of their executive duties with immediate effect after accepting responsibility for the bungled implementation of a new computer supply system which resulted in chaotic trading at the furniture retailer.

Analysts, who have viewed MFI as a bid target for some time, reiterated their belief that predators such as GUS, Kingfisher and private equity houses such as Cinven could pounce on the troubled retailer soon.

The company revealed its supply chain problems last week, along with the news that its UK retail operations would make a "substantial loss" for the current financial year.

John Hancock, MFI's chief executive, said yesterday the company would be instigating an independent review of the installation of the new supply chain system supplied by the German software giant SAP and the computer maker IBM.

He said it was too early to say if MFI would have any recourse to its IT suppliers over the botched system, which left customers waiting weeks for deliveries that were often incomplete on arrival.

"I am reserving my position on that at the moment," Mr Hancock said. He rejected criticism of his own performance at MFI and the fact that he splits his domestic life between England and the US, where he is raising his family in Atlanta, Georgia.

"I've always run MFI from the UK. I have a house in the UK. I live here and have a house in the US where my eldest child is in school there. I think in the last four months I've been to Atlanta twice. I spend the vast majority of my time in this country."

The two directors who left yesterday will receive pay-offs equal to a year's salary. Mr MacDonald will receive £280,000 and Mr Clifford-King will get £255,000. "They accepted responsibility," Mr Hancock said. "Gordon was in charge of the supply chain and I think Martin accepts his credibility is important on these issues."

Mr Hancock insisted that last week's bad news was not a mortal blow to the company and that it had an independent future. "We are dealing with some difficult problems in the short term. They relate clearly to the event of putting in the computerised inventory management system which is something you do every 10 or 15 years. We are dealing with the customer service issues. When properly in place we will have much better customer services. There is quite clearly cause and effect."

Mr Hancock will assume responsibility for the supply chain and category management. Shaun O'Callaghan, the strategy and development director, has been appointed interim finance director pending the appointment of a replacement.

The shares closed down 3 per cent at 104.75p, giving the company a market value of £642m.

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