MFI store sold for £1

Struggling furniture chain MFI was today given shareholder backing for the sale of its 200 stores for just £1.

More than 99% of shareholders voted in favour of the sale of its loss-making retail arm to private equity firm Merchant Equity Partners for the nominal fee.

The retail business has struggled from supply chain problems and made operating losses of £85.1 (€126.5m) last year.

MFI will pay Merchant £74m (€110m) between now and April 2008 to invest in the stores, which its manufacturing arm will continue to supply in the short-term before exclusively building kitchens and bedrooms for its Howden Joinery business.

Shareholders will vote again next Monday on the proposed name change for the rest of the MFI business to Galiform.

MFI also confirmed that Will Samuel has taken over as chairman from Ian Peacock.

Mr Samuel today said it was now time for the company to focus on Howden Joinery, which has 362 outlets around the UK. MFI plans to take the number of sites to more than 500 with 60 set to open next year.

The problems at MFI’s retail arm saw shares plummet from 143p in February last year to as low as 65.25p in November, although they stood at 98.5p today.

MFI began the auction of its stores in May after revealing it had received a number of approaches for the business, which has suffered from soaring costs.