MFI bosses quit after warning

FURNITURE firm MFI is parting company with its finance director and the head of its supply chain following the group's shock profits warning last week.

They have fallen on their swords in the wake of the botched implementation of a new £50m supply system that means the UK retail operation will make a 'substantial' loss this year.

But both will receive a year's salary as compensation - £280,000 for Gordon MacDonald, who was in charge of the supply chain, and £255,000 for finance director Martin Clifford-King.

The group said they were going by mutual consent and have left the board with immediate effect. They will leave the company after a short handover period.

Chief executive John Hancock, who along with chairman Ian Peacock has come under fire in the City for not highlighting the supply problems earlier, said he would be taking on overall responsibility for supply chain and category management.

Strategy and development director Shaun O'Callaghan will become interim chief financial officer. The search for a permanent replacement is under way.

Meanwhile, investment bank Goldman Sachs cut its rating for MFI from in-line to underperform, saying it believed the supply chain problems would take longer than expected to sort out and that there may well be further bad news on trading. Most analysts have halved their profit forecasts for the group to £50m.