MFI Furniture Group
Encyclopedia
MFI Group Limited, trading as MFI, was a national British
furniture
retailer. It was one of the largest suppliers of kitchens and bedroom furniture in the UK, and operated mainly in retail park
s in out-of-town locations. After success in its early decades it more recently experienced recurring financial
problems accompanied by several changes of ownership, and on 26 November 2008 it was announced that the company had been placed into administration. Merchant Equity Partners
, headed by Henry Jackson
, was the last company to own it, before it was sold to the management in September 2008 for a "small profit." The company ceased trading by 19 December 2008 after the administrators failed to find a buyer.
in 1971, as MFI Warehouses. An external manager, Derek Hunt, was recruited soon afterwards.
In the 1980s, MFI entered into partnerships, firstly in 1985 with Asda
and then with Schreiber Furniture. The Asda connection was soon dissolved over concerns about the company's future and there was a management buy-out in October 1987.
In the new millennium, serious and highly publicised IT problems affecting customers damaged the company's credibility and the finance director and chief operating officer left the company.
With the advent of out of town shopping during the 1980s, MFI opened a host of stores in such developments. In 1985, MFI was the very first tenant of the Merry Hill Shopping Centre
at Brierley Hill
in the West Midlands
- opening a new store which within four years was part of the largest shopping complex in Western Europe
.
MFI gained a new rival in 1987 when Swedish
furniture retailer IKEA
began trading in Britain and expanded over the coming years. Soon afterwards, DIY retail giant B&Q
expanded into the furniture market and emerged as a surprise new rival for MFI.
Despite this, MFI was still expanding as late as 2002, when it took over Sofa Workshop
.
By 2006, it was clear that MFI's fortunes were declining. Despite the British economy still being strong and recession
not even on the horizon, it was reported that sales for the previous year had fallen to £742million compared to £854million in 2003. In September 2006 the retail arm of the company acquired by Merchant Equity Partners
for £1 after which the parent company changed its name to Galiform.
MFI Retail was the subject of a second management buyout in September 2008, but by this stage the British economy was sliding into recession, unemployment was rising and retail sales were falling. MFI's future was looking bleak.
Early on 25 November 2008, the BBC first reported the possibility of MFI going into administration, with MFI desiring a three-month rent-free period from landlord
s. Later the following day it was announced that no agreement could be reached and PropertyWeek reported that Menzies Corporate Restructuring had been appointed as administrators. On the 26 November 2008, after a board meeting MFI went into administration. The Company was unable to confirm what would happen to consumers with pending orders. On 19 December 2008 all 111 MFI stores were closed with the loss of 1,200 jobs .
It was one of the first tenants of the Merry Hill Shopping Centre
, opening a store there in 1985 in the retail warehousing section of the development.
The Company had sought to upgrade many aspects of the business, including greater focus on customer service; updating and improving the product range; improving utilisation of floor space; establishing closer supplier relationships; investing in logistics, IT, supply systems and product development and enhancing internal communications.
It offered a full range of furniture for bedrooms, bathroooms, kitchens, lounges, dining rooms and home offices. It was particularly associated with self-assembly furniture.
Its products were mainly targeted to value-oriented customers with the "Hygena" brand, and those on a higher income with the "Schreiber" brand. MFI was also one of the largest suppliers of installed appliances in the UK with its own brand "Diplomat". New and exclusive to MFI was its "Space Genie" range which were ingenious storage solutions for the kitchen and bedroom. MFI sold beds directly from Silentnight, Rest Assured and Layezee, and also sold dining furniture from The Chair Company. Other MFI brands included "Viva Sofa" and "The Bath Co."
it emerged that 4 out of 5 kitchens in the "sale" had never actually been sold at the higher price against which the discount claims were being made. Which?
stated that "MFI's pricing policy deceived its customers into thinking they are getting a better deal than they are. In some cases, its pricing is downright misleading". MFI's advertising of such sales also came in for criticism for using phrases such as "Hurry! Only four days left" or "Prices too good to last" even though a new sale would almost always be launched immediately afterwards.
MFI was also known for being one of the first ever companies to be investigated by the BBC programme "Watchdog
". The programme attempted to buy a £600 kitchen advertised by MFI, though the price only actually included kitchen units and not the appliances shown.
concluded that it "was likely to cause serious or widespread offence to viewers and could be seen to condone intimidation, domestic violence and aggression as an acceptable way to resolve issues". The ASA went as far as to state that "it could also cause social, moral or psychological harm to children" and they were "concerned that it had been broadcast at all". As a result the advertisement was banned.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
furniture
Furniture
Furniture is the mass noun for the movable objects intended to support various human activities such as seating and sleeping in beds, to hold objects at a convenient height for work using horizontal surfaces above the ground, or to store things...
retailer. It was one of the largest suppliers of kitchens and bedroom furniture in the UK, and operated mainly in retail park
Retail park
In the United Kingdom, a retail park is a grouping of many retail warehouses and superstores with associated car parking. Its North American equivalent is a power centre. Retail parks are found on the fringes of most large towns and cities in highly accessible locations and are aimed at households...
s in out-of-town locations. After success in its early decades it more recently experienced recurring financial
FINANCIAL
FINANCIAL is the weekly English-language newspaper with offices in Tbilisi, Georgia and Kiev, Ukraine. Published by Intelligence Group LLC, FINANCIAL is focused on opinion leaders and top business decision-makers; It's about world’s largest companies, investing, careers, and small business. It is...
problems accompanied by several changes of ownership, and on 26 November 2008 it was announced that the company had been placed into administration. Merchant Equity Partners
DLJ Merchant Banking Partners
DLJ Merchant Banking Partners is a private equity investment firm focused on leveraged buyout transactions. The firm is currently an affiliate of Credit Suisse and traces its roots to Donaldson, Lufkin & Jenrette, the investment bank acquired by Credit Suisse First Boston in 2000...
, headed by Henry Jackson
Henry Jackson (businessman)
Henry Jackson is a British-American businessman, who is Managing Partner and Chief Executive of OpCapita LLP, based in London...
, was the last company to own it, before it was sold to the management in September 2008 for a "small profit." The company ceased trading by 19 December 2008 after the administrators failed to find a buyer.
History
MFI was founded in 1964 as Mullard Furniture Industries by two British men, Noel Lister and Donald Searle, who previously traded in war surplus goods. The new company was named after Searle's wife's maiden name. The company became a public companyPublic company
This is not the same as a Government-owned corporation.A public company or publicly traded company is a limited liability company that offers its securities for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets...
in 1971, as MFI Warehouses. An external manager, Derek Hunt, was recruited soon afterwards.
In the 1980s, MFI entered into partnerships, firstly in 1985 with Asda
Asda
Asda Stores Ltd is a British supermarket chain which retails food, clothing, general merchandise, toys and financial services. It also has a mobile telephone network, , Asda Mobile...
and then with Schreiber Furniture. The Asda connection was soon dissolved over concerns about the company's future and there was a management buy-out in October 1987.
In the new millennium, serious and highly publicised IT problems affecting customers damaged the company's credibility and the finance director and chief operating officer left the company.
With the advent of out of town shopping during the 1980s, MFI opened a host of stores in such developments. In 1985, MFI was the very first tenant of the Merry Hill Shopping Centre
Merry Hill Shopping Centre
Westfield Merry Hill is a shopping centre in Brierley Hill near Dudley, West Midlands, England. It was developed between 1985 and 1990, with several expansion and renovation projects taking place since. The original developers and owners were Richardson Developments but the Centre has had a number...
at Brierley Hill
Brierley Hill
Brierley Hill is a town and electoral ward of the Metropolitan Borough of Dudley, West Midlands, England. It is one of the larger Black Country towns with a population of 9,631 and is heavily industrialised, best known for glass and steel manufacturing, although the industry has declined...
in the West Midlands
West Midlands (county)
The West Midlands is a metropolitan county in western central England with a 2009 estimated population of 2,638,700. It came into existence as a metropolitan county in 1974 after the passage of the Local Government Act 1972, formed from parts of Staffordshire, Worcestershire and Warwickshire. The...
- opening a new store which within four years was part of the largest shopping complex in Western Europe
Western Europe
Western Europe is a loose term for the collection of countries in the western most region of the European continents, though this definition is context-dependent and carries cultural and political connotations. One definition describes Western Europe as a geographic entity—the region lying in the...
.
MFI gained a new rival in 1987 when Swedish
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
furniture retailer IKEA
IKEA
IKEA is a privately held, international home products company that designs and sells ready-to-assemble furniture such as beds and desks, appliances and home accessories. The company is the world's largest furniture retailer...
began trading in Britain and expanded over the coming years. Soon afterwards, DIY retail giant B&Q
B&Q
B&Q plc is a multinational DIY and home improvement retailer headquartered in Eastleigh, United Kingdom. It was founded in 1969 and is a wholly owned subsidiary of Kingfisher plc, which is listed on the London Stock Exchange....
expanded into the furniture market and emerged as a surprise new rival for MFI.
Despite this, MFI was still expanding as late as 2002, when it took over Sofa Workshop
Sofa Workshop
The Sofa Workshop Ltd are a furniture manufacturer and retailer formerly based in Lodsworth, West Sussex, United Kingdom, now at Farnborough, Hampshire. They are best known for creating stylish retro furniture and offering an unprecedented level of fabric customisation. - History :Sofa Workshop,...
.
By 2006, it was clear that MFI's fortunes were declining. Despite the British economy still being strong and recession
Late 2000s recession
The late-2000s recession, sometimes referred to as the Great Recession or Lesser Depression or Long Recession, is a severe ongoing global economic problem that began in December 2007 and took a particularly sharp downward turn in September 2008. The Great Recession has affected the entire world...
not even on the horizon, it was reported that sales for the previous year had fallen to £742million compared to £854million in 2003. In September 2006 the retail arm of the company acquired by Merchant Equity Partners
DLJ Merchant Banking Partners
DLJ Merchant Banking Partners is a private equity investment firm focused on leveraged buyout transactions. The firm is currently an affiliate of Credit Suisse and traces its roots to Donaldson, Lufkin & Jenrette, the investment bank acquired by Credit Suisse First Boston in 2000...
for £1 after which the parent company changed its name to Galiform.
MFI Retail was the subject of a second management buyout in September 2008, but by this stage the British economy was sliding into recession, unemployment was rising and retail sales were falling. MFI's future was looking bleak.
Landlord
A landlord is the owner of a house, apartment, condominium, or real estate which is rented or leased to an individual or business, who is called a tenant . When a juristic person is in this position, the term landlord is used. Other terms include lessor and owner...
s. Later the following day it was announced that no agreement could be reached and PropertyWeek reported that Menzies Corporate Restructuring had been appointed as administrators. On the 26 November 2008, after a board meeting MFI went into administration. The Company was unable to confirm what would happen to consumers with pending orders. On 19 December 2008 all 111 MFI stores were closed with the loss of 1,200 jobs .
Operations
MFI operated over 100 stores across the UK of between 15,000 & 30000 square feet (2,787.1 m²). Home deliveries amounted for over 50 million items a year going to 2.5 million households in the UK & Northern Ireland.It was one of the first tenants of the Merry Hill Shopping Centre
Merry Hill Shopping Centre
Westfield Merry Hill is a shopping centre in Brierley Hill near Dudley, West Midlands, England. It was developed between 1985 and 1990, with several expansion and renovation projects taking place since. The original developers and owners were Richardson Developments but the Centre has had a number...
, opening a store there in 1985 in the retail warehousing section of the development.
The Company had sought to upgrade many aspects of the business, including greater focus on customer service; updating and improving the product range; improving utilisation of floor space; establishing closer supplier relationships; investing in logistics, IT, supply systems and product development and enhancing internal communications.
It offered a full range of furniture for bedrooms, bathroooms, kitchens, lounges, dining rooms and home offices. It was particularly associated with self-assembly furniture.
Its products were mainly targeted to value-oriented customers with the "Hygena" brand, and those on a higher income with the "Schreiber" brand. MFI was also one of the largest suppliers of installed appliances in the UK with its own brand "Diplomat". New and exclusive to MFI was its "Space Genie" range which were ingenious storage solutions for the kitchen and bedroom. MFI sold beds directly from Silentnight, Rest Assured and Layezee, and also sold dining furniture from The Chair Company. Other MFI brands included "Viva Sofa" and "The Bath Co."
Criticisms
MFI had been criticised for the excessive frequency and length of its sales. In a six month survey by consumer magazine Which?Which?
Which? is a product-testing and consumer campaigning charity with a magazine, website and various other services run by Which? Ltd ....
it emerged that 4 out of 5 kitchens in the "sale" had never actually been sold at the higher price against which the discount claims were being made. Which?
Which?
Which? is a product-testing and consumer campaigning charity with a magazine, website and various other services run by Which? Ltd ....
stated that "MFI's pricing policy deceived its customers into thinking they are getting a better deal than they are. In some cases, its pricing is downright misleading". MFI's advertising of such sales also came in for criticism for using phrases such as "Hurry! Only four days left" or "Prices too good to last" even though a new sale would almost always be launched immediately afterwards.
MFI was also known for being one of the first ever companies to be investigated by the BBC programme "Watchdog
Watchdog (TV series)
Watchdog is a BBC television series that investigates viewers' reports of problematic experiences with traders, retailers, and other companies around the UK...
". The programme attempted to buy a £600 kitchen advertised by MFI, though the price only actually included kitchen units and not the appliances shown.
Controversies
In September 2007 MFI was forced to withdraw a television advert featuring a woman slapping her husband in the face twice and shouting at him for leaving the toilet seat up. Those complaining felt that the advert trivialised the issue of domestic violence against men. The ASAAdvertising Standards Authority (United Kingdom)
The Advertising Standards Authority is the self-regulatory organisation of the advertising industry in the United Kingdom. The ASA is a non-statutory organisation and so cannot interpret or enforce legislation. However, its code of advertising practice broadly reflects legislation in many instances...
concluded that it "was likely to cause serious or widespread offence to viewers and could be seen to condone intimidation, domestic violence and aggression as an acceptable way to resolve issues". The ASA went as far as to state that "it could also cause social, moral or psychological harm to children" and they were "concerned that it had been broadcast at all". As a result the advertisement was banned.