MFI sacks two directors over supply chain failure

Two directors have been sacked at furniture group MFI following an admission that problems with its supply chain systems will lead to 'substantial' financial losses for the firm.

Finance director Martin Clifford-King and chief operating officer Gordon MacDonald both stood down with immediate effect over the botched implementation of the new system.

MFI issued a statement this week warning shareholders of an unexpected shortfall in its ability to deliver orders as planned.

The company has also admitted that it was unable to fulfil new kitchen orders because of ongoing supply chain problems.

MFI announced in May 2002 that it was starting the second phase of a five-year plan to replace its supply chain and enterprise resource planning systems with SAP software.

It operates a more complex supply chain than many other retailers, as it builds, distributes and sells a wide range of household furniture across 192 UK stores, as well as operating a customer delivery operation.

A spokeswoman says the firm is still working to resolve the causes of the problems, as it gains closer understanding of the new system.

Meanwhile, analysts have slashed the firm's profit expectations for the year following the news.