Sunday, September 24, 2006

MFI sell their stores for £1

Madness I thought. MFI selling their loss-making stores for a nominal £1. What’s left of MFI if they don’t have stores to flog furniture?

(For non-UK readers it's probably best for me to pause for a minute to explain that MFI are a furniture store - selling more solid but less trendy gear than Ikea. Twenty years ago you carried the flat pack furniture boxes out of the store on your way home. These days, you can look around their store, choose from the catalogue, and it's all delivered for self-assembly within a week or two.)

So back to the question ... What’s left of MFI if they don’t have stores to flog furniture?

A surprising amount. To quote their corporate website: “MFI is the largest furniture manufacturer in the UK.” (They’ve a video to explain.) Smaller than they used to be since they sold the Hygena kitchen brand to a Swedish firm - Nobia - at the beginning of 2006. They also manage the delivery logistics and installation.

(I seem to remember ParcelFarce delivering MFI goods in NI. It took about four deliveries - and a visit to the local store to pick up some missing screws - to get enough unbroken/unscratched parts to build my first wardrobe. And a couple of years later, when I bought a second matching wardrobe, one of the side panels was split in two - so I had to wait a fortnight to get a new one posted out before I could start assembling it.)

Augmenting their unprofitable MFI retail shops, MFI Group started Howdens Joinery back in 1995 to sell kitchens and other joinery product to organisations that wouldn’t normally shop at MFI stores. Very cunning!

With over 300 branches across the UK and trading with builders, local authorities and housing associations, Howdens has sustained growth and is the most profitable part of the group (particularly in comparison to the MFI retail stores).

The shrinking MFI Group will change it’s name to Galiform later this year if shareholders approve the sale to the equity firm MEP Mayflower Limited. That’ll allow the new owner to keep the MFI brand on the retail stores. (No surprise that the domain was registered on 1 September 2006.)

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