Furniture retailer MFI could be forced into administration unless the firm's store landlords agree to a rent-free period, the GMB trade union has warned.
Furniture retailer MFI is set to go into administration - citing falling demand for big ticket items, cash-flow problems and the withdrawal of credit.
The comments from the GMB come amid growing press reports that MFI is considering a move into administration because of financial problems.
Some stores will continue to trade, but 26 will close. Existing orders will be either met or refunded, MFI said.
MFI, subject of a management buy-out in September, was unavailable for comment.
The GMB union had warned this was likely unless the firm's store landlords agreed to a rent-free period.
The company currently has 110 stores across the country and a workforce of more than 1,000 people.
MFI, subject of a management buy-out in September, has 110 stores and a workforce of more than 1,000 people.
Analysts said that the downturn of the housing market was a major contributor to MFI's decline, people stopped buying things such as new bathrooms and kitchens.
'Irresponsible'
'Irresponsible'
"GMB members are asking former owner Galiform and other landlords of the 100 stores across the UK to be patient and agree to the rent-free period asked for by the management who bought the firm at the end of September," said Gary Smith, GMB National Secretary.
MCR have been appointed as administrators, who will work to maximise returns to creditors.
Phil Duffy of the administrators said that "whilst a decision has not been made as to an appropriate exit route and the future of the company, the administrators will be reviewing the possibility of a sale of some or all of the Company's stores."
MFI FACTS Founded in 1964 as Mullard Furniture IndustriesMullard was the maiden name of the wife of one of the co-foundersStores sold for just £1 in 2006 to private equity firm Merchant Equity PartnersManagement buyout in September takes on 110 storesEmploys more than 1,000 people
MFI FACTS Founded in 1964 as Mullard Furniture IndustriesMullard was the maiden name of the wife of one of the co-foundersStores sold for just £1 in 2006 to private equity firm Merchant Equity PartnersManagement buyout in September takes on 110 storesEmploys more than 1,000 people
"The forthcoming cut in VAT may see an upsurge in business and it would be irresponsible of the landlords to put 1,000 people out of work by pushing the company into administration."
All outstanding employee wages have been paid up to date and ongoing wages for retained staff will continue to be paid he added.
Led by chief executive Gary Favell, September's buy-out took on 110 MFI stores, while 81 loss-making outlets were placed in administration.
MFI has seen sales fall in recent years as it has faced increased competition from newer rivals such as Ikea.
MFI has seen sales fall in recent years as it has faced increased competition from newer rivals such as Ikea.
The management buy-out bought MFI from previous owner, private equity group Merchant Equity Partners (MEP).
The management buy-out bought MFI from its previous owner, private equity group Merchant Equity Partners (MEP).
MEP bought the retail business for £1 in 2006 from the former MFI company, which renamed itself Galiform and maintained ownership of the manufacturing arm.
MEP bought the retail business for £1 in 2006 from the former MFI company, which renamed itself Galiform and maintained ownership of the manufacturing arm.
The GMB union said that MFI employees would not have been surprised at the development, saying the firm had been "badly managed for some years".
But the union's Yorkshire regional secretary Tim Roache said is was "disappointing that the landlords of the shops pulled the plug and did not give the management time to turn it around".
Have you been affected by issues covered in this story? Do you work for MFI? Are you a shareholder? Send us your comments using the form below.
Have you been affected by issues covered in this story? Do you work for MFI? Are you a shareholder? Send us your comments using the form below.
