MFI, the furniture chain sold for a nominal £1 two years ago, has brought in a corporate restructuring expert a fortnight after the collapse of one of its rivals.

The retailer, owned by Merchant Equity Partners (MEP), is working with Kroll Talbot Hughes (KTH), a company that turns around distressed businesses. John Talbot, one of the key partners at KTH, is an insolvency expert who has worked on the restructuring of Marconi, Energis and Cordiant Communications in recent years.

An MFI spokesman insisted yesterday that KTH had been brought in to bolster the retailer's “under-resourced finance function”. He added: “KTH is helping with our financial reporting systems, operating issues and forecasting. This is not a restructuring issue.”

The move is unlikely to quell speculation about the impact of the credit crunch on one of the best-known furniture retailers in the country. MFI announced this month plans to close a call centre in Sunderland with the loss of 170 jobs.

The chain was forced to scrap a £24 million marketing campaign involving M&C Saatchi and Zenith Optimedia in May after insurers declined to cover the possibility that MFI might fail to pay for the work.

The furniture sector has been the hardest hit by the consumer downturn on the high street. ScS Upholstery, the sofa chain, went into administration this month before Sun European Partners bought the trading operation for a negligible sum.

MFI runs 200 stores in Britain and is thought to have £20 million in the bank after paying its £17 million quarterly rent bill last month. The spokesman refused to comment on trading.

MEP bought the chain for £1 in September 2006 from MFI plc, a company that has since changed its name to Galiform Holdings.

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