MFI on verge of administration

Furniture giant, MFI, is on the verge of administration after it is struggling to find ways of raising funds to pay its quarterly rent for its 190 stores.

The retailer has been in crisis talks over the weekend after being hit by a downturn in sales. It has been hit by the slowdown in consumer spending

Last week, MFI appointed finance house, Argyll Partners, to find investors while in July, restructuring group, Kroll Talbot Hughes, were appointed.

Should the furniture giant enter into administration, it would be the most high-profile victim so far in the retailing industry.

The group’s chief executive, Gary Favell, has been holding talks with a number of possible financiers of a takeover bid.

Sources say that a management buyout is the most likely option to resolve the future of the furniture giant.

Meanwhile, another option is a strategy to place itself in administration and then buy back the most valuable assets. Reports say that MFI wants to slash the number of stores it has by half.

Currys and PC World owner, DSG International, said they had been hit by hesitant shoppers that has resulted in a fall in sales.

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