More than half of MFI’s stores are to be saved after the company went into administration yesterday.
A management team, led by MFI’s chief executive Gary Favell, has bought 106 stores for the new company MFI Group and is in negotitions to buy further stores of the 190-strong kitchen retail chain.
The ‘pre-pack’ deal was agreed with administrator Kroll yesterday.
The management, as revealed by Property Week last month, has been in emergency talks with landlords to plea for three months rent free for its stores.
Many landlords have agreed to the proposals hoping that a rent-free period will enable many of the stores to survive into next year.
It is thought there is up to 25 further stores that MFI Group is hoping to also save if it can agree longer rent free periods than three months and it is still in negotiations with landlords for these stores.
It is thought that the liability for 46 MFI leases could revert back to Galiform, which sold MFI to Merchant Private Equity two years ago.
It is thought more than 20 of these stores may not be saved by the MFI Group and may revert back to Galiform.
Fraser Gray, a partner at Kroll 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.