MFI's owners exploring new investment – or 'combination'

Published on Sunday 7 September 2008 21:48

FURNISHINGS chain MFI is at the centre of speculation over a possible merger with the owner of rival kitchens brand Moben.

Merchant Equity Partners, which bought the retail arm of MFI for a nominal 1 in 2006, is said to be exploring potential combinations for the business, as well as the possibility of attracting further investment.

Weekend reports said that MFI was looking at a merger with its British rival Homeform, which owns brands Moben, Kitchens Direct, Sharps and Dolphin.

Manchester-based Homeform has 160 showrooms across the UK with more than 1,300 employees and 1,500 self-employed fitters and designers.

Talks are also said to have taken place with Nobia, the Swedish retailer, about combining its UK business, Magnet Kitchens, with MFI. Discussions have also been held with several private equity firms and hedge funds about an additional injection of cash.

A spokesman for Merchant was reported as saying it had been happy with operational progress since the 2006 deal, but that recent market conditions had prompted it to consider its strategic options and "possible business combinations".

MFI – one of the UK's best known retail brands – has been the subject of frequent speculation about its future. However, sources yesterday claimed that the retailer will survive and that its original backers will continue to provide support.

The manufacturing arm of MFI, which separated from the retail chain two years ago, revealed plans to expand its Howden joinery business after the split.