MFI retail and property divisions placed into administration

Administrator Kroll was appointed to oversee the process.

The MBO saved 1,350 jobs and 106 out of the 187 stores under the new company, MFI Group.

The companies’ remaining 81 stores, head office and distribution centre are continuing to trade in administration while the administrators consider a range of options. All existing customer deposits from all stores will be protected and orders fulfilled. 39 of MFI’s staff have been made redundant.

A Kroll spokesman said: “The completion of a management buyout prior to our appointment as Administrators means that a substantial part of MFI has already been saved.

“Despite the turbulent trading conditions in the retail sector, we are currently in discussions with a number of potential purchasers – including the management buyout team - for the Companies’ head office, distribution centre and remaining stores.

“In the interim, MFI will continue to trade as usual and all existing customer orders from all stores will be honoured.

“We appreciate that this is a concerning time for employees and customers alike and are grateful for the patience and cooperation of those affected.”

It is understood that the liability for 46 of the leases could revert back to Galiform, the company that sold MFI to Merchant Equity Partners (MEP) two years ago. MEP agreed to hand over extra cash for the management buyout.