THE Yorkshire owners of the MFI brand, which was yesterday re-launched as an online furniture retailer, could also resurrect the Focus DIY brand after buying it out of administration, the Yorkshire Post understands.
Administrators Ernst & Young yesterday confirmed the Walker Group, the Hull-based family behind the re-launch of MFI, recently purchased the Focus DIY home improvements brand for an undisclosed sum.
Hull-based group Walker Group bought the MFI brand from administrators in August 2009 for £250,000, and after two years developing a website and operations, yesterday unveiled the new MFI amid the biggest squeeze on consumer income for decades.
“We’re not saddled with the stores and the costs associated with them,” said commercial director Adrian Storr. “We are focusing on the categories which we know are proven winners.
“We will be able to operate with lower retail pricing in comparison to our competitors.”
MFI collapsed into administration in November 2008, blaming the credit crunch for dampening demand for ‘big ticket’ items, withdrawal of credit and cash flow problems. Its collapse left about 30,000 customers waiting for orders at the time.
Mr Storr, the former merchandise director at MFI, insisted consumers still recognise and like the brand.
“I would like to think that customers know that this is in new ownership,” he said. “The feedback we are getting from surveys is that the brand will be very welcome back in the market place.”
MFI will sell bedroom, bathroom, dining room and lounge furniture including sofas, beds, divans, mattresses and beds. It will compete with retailers such as B&Q, IKEA and Homebase. However, unlike the former MFI, it will not sell fitted kitchens.
Its initial range features 2,500 products, which Mr Storr said should grow to about 3,500.
Mr Storr said: “We want to get this business off the ground, first and foremost.
“(But) if you think about purchasing a kitchen, you’re actually purchasing a project. There are 240-250 components in a kitchen.”
In its new guise, MFI will operate as an online-only retailer. It is using Hull telecoms firm KC to operate an outsourced call centre, and will employ a skeleton team of about 35 staff, mainly based in Hull.
Its call centre is open six days a week, and delivery is via an outsourced logistics firm. It will not make or design its own furniture, instead sourcing it from a range of suppliers, which already stock national chains.
Some of its products will be made to order, with lead times of several weeks. Some products will be stored at Walker Group’s warehouse at Carnaby near Bridlington.
Mr Storr said: “What we don’t want to do is disappoint our customers. We need to make sure that what we bring to market is very robust.
“Because we’re not saddled with shops and massive overheads, we believe we can source and supply stylish, quality products at affordable prices.”
The Walker Group is owned by Hull’s Walker family, which also has brands including bathroom company Victoria Plumb.
Mr Storr declined to comment on a possible re-launch of Focus DIY. Focus was one of a string of furniture retailer administrations this year, alongside Habitat and HomeForm.
Focus called in administrators Ernst & Young in May after struggling amid the tough consumer environment.
Focus employed about 3,900 people at 178 stores at the time of its collapse.
According to filings with Companies House, Focus D.I.Y Direct Ltd, registered at Walker Group’s Hull address, was incorporated in September.
“Walker Group have bought the brand name. The price is confidential,” said an E&Y spokesman.
Mr Storr previously worked at caravan retailer Discover Leisure, but joined MFI shortly before the East Yorkshire-based group fell into administration in October.
Singer Capital Markets analysts said: “Whether or not it gains critical mass in this environment is a big question.”
The rise and fall...
MFI was one of the UK’s best-known retail brands and established itself as a major player in home furnishing.
It was founded in 1964 by Noel Lister and Donald Searle – who called it Mulland Furniture Industries, after Mr Searle’s wife’s maiden name.
It started out as a mail order business but three years later opened its first shop, in Balham, south London, and grew to become the biggest furniture retailer in the UK, with a value of £1bn at one point.
MFI was split in 2006, when private equity firm Merchant Equity Partners bought it for £1. The rest of the business was renamed first Galiform and subsequently Howden Joinery, and sells kitchens to the trade.
But MFI’s position as market leader was hit by the growth of rival stores, the decline in the property market and the recession. It collapsed in November 2008.