MFI saved with management buyout
Monday 29th September 2008, 12:00PM BST.
Furniture chain MFI has been saved from bankruptcy by a management buyout after sales were hit by the property market downturn.
The management team, led by chief executive Gary Favell bought the retailer from private equity firm Merchant Equity Partners (MEP) for an undisclosed amount.
MEP bought MFI for £1 in 2006, after furniture sales were hit by a slump in the property market.
Although MEP is expected to make some profit from the sale, the turnaround it was hoping for never quite materialised despite significant investment in the business.
The buyout means MFI’s 3,100 staff have a reprieve.
“I am delighted that we have secured the future of the MFI business through this management buy-out and have the capital to provide continuity and security for our customers, who continue to support MFI as the largest fitted furniture business in the UK,” Mr Favell said.
Mr Favell said the team would improve sales through increasing the number of concession partnerships within stores.
He added that sales in recent weeks have been “ahead of plan”.
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