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MFI back from the wilderness

Walker Group has announced plans to relaunch the MFI brand.

Having collapsed during the recession nearly two years ago, furniture retailer MFI is set to return to the market after Walker Group, a small family–owned business, paid administrator MCR GBP250,000 for the brand rights. While repairing MFI's battered brand image will be difficult, this is not the biggest challenge that Walker Group faces.
Walker Group, which also operates the online bathroom retailer Victoria Plumb, acquired the brand name at the start of August 2010 and has since set a website using the old MFI logo. The group has stated that the MFI brand will return with a more innovative, style–based offer while continuing to offer excellent value and choice. At present, it is uncertain as to whether MFI will open stores to support its offer or if it will operate as a pureplay retailer like its sister fascia, Victoria Plumb.

Re–launching MFI will provide Walker Group with a more rounded offer to sit alongside its core bathrooms business and its existing infrastructure presents obvious logistical advantages. However, with many customers losing significant sums of money following MFI's collapse in November 2008, repairing the brand's image is a more serious problem. The group will need to cut ties with MFI's past and instead emphasize the new ownership.

Even if the MFI brand can be repaired, Walker Group will still face the challenge of prospering in the limited furniture retail space. With customers being more austere and the housing market remaining stagnant, many shoppers have no reason or desire to replace their kitchens. Furthermore, the void left by MFI has largely been filled, mainly by the larger DIY specialists, such as Wickes and B&Q. To gain traction, MFI will either need to benefit from overall market growth, which is unlikely, or take sales from other retailers.

Another problem it will have to overcome will be if it chooses to operate solely as a pureplay. Selling furniture online has yet to take off, as customers generally want to see and touch the item before purchasing it. This would be especially true for larger purchases, such as a new kitchen where aspects such as dimensions are so important. Shoppers are also unlikely to feel comfortable making such large purchases online, particularly with a business that was one of the biggest casualties of the downturn.

While the prospects for the kitchen market are set to improve as the housing sector recovers from 2012 onwards, the Walker Group will have its work cut out to place MFI in a position to take advantage of this uplift. Given its blemished history, Walker Group faces a huge challenge to make MFI a success.

Source : Verdict Research

25 August 2010
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