Closing some stores and slimming down manufacturing capacity were the right things for chief executive Matthew Ingle to do. But will shutting 11 stores be sufficient to stem the decline?
Ingle deserves a degree of sympathy. MFI operates in what is probably the toughest sub-sector of UK retail and his task has been made harder still by the mistakes of previous management. Unlike his predecessor John Hancock, he cannot rely on the stellar growth of trade arm Howdens, which has now slowed, to make the picture look rosier.
There are two huge challenges facing Ingle. The company's delivery problems have been lessened, but the boast that the company has gone from 60 per cent of deliveries arriving incomplete or late to 40 per cent only shows to serve the mess it is in. The figure needs to drop much lower, and quickly, if what remains of MFI's reputation with consumers can be salvaged.
The other challenge is the competitive state of mid-market furniture retailing. Ikea has shown that if you get the product and price right, shoppers will come flocking. But even its growth has been checked in recent months. Ikea's Scandinavian rival Ilva arrives in the UK soon and looks to be an equally strong competitor.
But consumer confidence remains low and fewer people are moving house, which inevitably means people's propensity to invest in their homes is lower. There are some slight signs of improvement, but they are distant and faint, and the number of casualties in the home sector in the past six months shows this.
Some clever deals, such as the sale of its French Hygena Cuisines business, have kept the wolf from the door for the time being. But Ingle needs to be more radical if MFI is to have a long-term future.
The closure of the loophole that allowed retailers to import small items from Jersey and Guernsey was greeted with gnashing of teeth.
While it is frustrating in the short term, what the islands' governments have done is entirely logical. If retailers think the VAT system needs to be reformed, they should do it by lobbying through the BRC, but finding backdoor ways to avoid it will only ever create short-lived solutions.
That said, what's the betting some clever retailer will find an empty warehouse on Sark or Alderney?
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