Momentum at MFI will calm investors

Furniture retailer MFI is enjoying a bumper winter Sale season - turnover for the first three weeks following Boxing Day was up 14 per cent to£174 million.

On a like-for-like basis, sales were ahead by 4 per cent. In addition, 'a significant gross margin improvement' was claimed.

'The momentum in the MFI chain continues. Footfall is up, and we are seeing strong growth in orders as customers respond positively to our new formats and range improvements,' said chief executive John Hancock.

The new format has been introduced to 76 of the 191 out-of-town sites, and the pace of refurbishment is to be quickened because of the success so far.

Like-for-like numbers exclude refurbished units. On a same-store basis, sales were up 9 per cent, proving the success of the new look.

Analysts at Merrill Lynch said in a note that the new-format stores have enabled MFI to close the pricing gap on its competitors. They estimated the gap stands at about 10 per cent.

CSFB analysts said the release of the reassuring trading figures just five weeks before the company's full-year results should calm investor concerns about a slowdown in the housing market.

A MFI spokeswoman said that fears of a slowdown were coloured by what is happening in London. 'We are a national retailer and are under-represented in London. We see no signs of a consumer confidence slump,' she said.

Despite exceeding the self-imposed three-year limit on his stewardship, there are no plans for Hancock to move on, she added.