Furniture retailer MFI is continuing to struggle against falling sales.
Orders at its UK retail stores were down 15% over the past eight weeks compared with the same period last year, it said in a trading statement.
For the second half of its financial year to 26 November, the drop in sales at its MFI stores widened to 18%.
The firm’s retail arm is struggling against a slowdown in both consumer spending and the housing market. Annual sales will be down 10%, it said.
Ongoing review
MFI parted company with its former chief executive John Hancock on 3 October, who was replaced by Matthew Ingle.
Mr Ingle is now leading a wide-ranging review of the group’s performance and strategy.
MFI’s Howden Joinery business, which sells kitchens to small builders, saw second-half same-store sales rise 4%, although this unit was also suffering from an “increasingly demanding” trading environment, MFI said.
The group said its results for the full year will be in line with market expectations.
Festive focus
As part of the ongoing review, MFI also announced on Thursday that it is to exit from three businesses – Howden Millworks in the US, a retail joint venture in Taiwan, and its Ethan Allen joint venture in the UK.
MFI said the decision to exit the three businesses would lead to a one-off charge of £16m ($28m) in the current year.
The two Ethan Allen stores in the UK should close by the end of March.
“In the short term, UK Retail is being managed for margin, cost control and cash, with the immediate focus on the important winter sale, which commences on Boxing Day,” said Mr Ingle.
MFI said action had been taken to shore up gross margin at its UK retail operation, with evidence of an improvement over the past two months.
It added that it was still in talks with its lenders over its finances, which include debts of around £63m.
From The BBC