British furniture group MFI said today it will leave bathroom and sofa retailing, close stores and depots, and reduce in-house manufacturing in restructuring that may lead to 1,470 job losses.
The firm, which recently sold its French Hygena chain and secured an asset-backed £150 million loan facility to help it restructure, announced a pretax loss of £600,000 before exceptionals for the year to December 24th, compared with analysts' average forecast of a £4.6 million loss.
MFI had prepared investors for a loss following a profit warning in October, the fourth in 12 months.
MFI said it would save money by increasing products sourced from third parties to 75 per cent from the current 50 per cent, potentially losing 9 per cent of the workforce, or 1,100 staff.
It will also sell its Sofa Workshop chain and close at least 11 of its 195 stores and three of its eight depots.
It will concentrate on selling higher-margin kitchens and bedroom furnishings but will downsize ranges, with the loss of up to 370 jobs.
In total, the restructuring will cost £34 million in 2006 with asset write-offs of £36 million. The measures will benefit the profit and loss account by £11 million in 2006 with annualised benefits of £23 million from 2007.