MFI’s talisman, John Hancock |
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Published
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Mon, 25 Jul 2005 08:05
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Furniture retailer MFI has admittedly faced a rough week what with the announcement that its profits had taken a hit. Add to this the fierce criticism from all quarters and you definitely would not want to be in Chief Executive John Hancock's shoes. MFI, which stands for Mullard
Furniture Industries has been called Made For Idiots and various such uncomplimentary sobriquets.
Last year, the company was hit by a severe crisis in the supply chains. Almost four out of ten deliveries were being bungled up as suppliers consistently got the wrong numbers. And this reflected in the group's balance sheet, which has registered a 26 percent dip. But John Hancock is not ready to put in the towel, "We had a lot of dislocation in our retail business last year, but we have managed to get positive sales growth in a difficult market,” he said. MFI's pre-tax profits stood at £22.9 million helped in a large measure by the success of its Howden Joinery business. Howden posted operating profits of £43.6 million, a 20 percent rise from last year.
Hancock is also tackling the supply chain ghost. He has underwritten a £60 million investment by £20 million last year. Plus he also made sure that Gordon MacDonald, the supply chain director was shown the door. A new system is being implemented to make sure that errors that occurred last year are not repeated, "It is going to be three years from when we put the system in, when we originally planned it as two. We've probably lost a year," Hancock said.
He also put into place a massive advertising blitz and instituted price cuts, which saw an increase in sales volumes in the 24 weeks up to June 11. The price cuts came in for sharp criticism from Which?, the consumer magazine. Allegations were leveled at MFI that the retailer had been overstating the discounts offered to customers, "We are not operating these pricing operations any differently from any other retailer," Hancock firmly stated.
In the six years that he has been in charge of the company, Hancock has seen a lot of ups and downs. In fact his contract with the company was only for three years. When asked if he was contemplating quitting, Hancock said, "We've had a difficult year and I'm prepared to see that through."
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