MFI chief executive Gary Favell has vowed to fight the savage downturn in the furniture market, insisting there is no immediate threat to the company’s future.

Speaking exclusively to Retail Week after a flurry of speculation about MFI’s financial well-being, Favell said that it was in a much healthier position than many rivals because it had no debt.

“There’s no debt in the company,” he said. “We’re not like a lot of these unfortunate companies that are in difficulty because they are breaking their banking covenants. We have investors who are very supportive.”

Favell said MFI was “trading reasonably well considering the market” and was repositioning to take on rivals such as Möben and Magnet in the mid-market. But he admitted he could not forecast what would happen if the market downturn were to worsen. “No one’s got a crystal ball,” he said.

Since owner Merchant Equity Partners bought MFI in October 2006, Favell said it has invested in a new logistics set-up and in stores, rolling out its German Küchen Lab kitchen range to 50 stores and its Chroma format to 12 shops.

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