Page 3: External growth
MFI's external growth has involved identifying businesses that match its goals. In the UK, the company mission is:
"To offer UK homeowners the biggest range of branded kitchens, bedrooms and associated products at unbeatable prices; all delivered free with a full range of design, installation and credit facilities."
MFI wants to help each customer live a better life in their home by offering full room solutions for every room. As with bathrooms, up until two years ago MFI did not sell sofas, despite 60% of all customers thinking that it did. With this strong perceived awareness and in keeping with its strategy for growth MFI started to sell sofas on a concession basis with The Sofa Workshop Company in 2001.
MFI piloted the sale of sofas in a handful of stores to confirm the research that customers would buy from MFI. The initial pilot proved successful and the next step was to take the new category introduction into the test stage. This involved introducing sofas into a greater number of stores to confirm the pilot results. This strategy of Pilot, Test, Invest is consistent with all investments MFI undertake. The next stage for sofas was invest.
In 2002, MFI acquired The Sofa Workshop Company and the Sofa Workshop brand, with its 26 High Street stores, as well as a mail order and Internet business. This has enabled MFI to introduce a quality branded sofa product into its stores.
Through MFI there is substantial growth potential for Sofa Workshop sofas. MFI have the advantage of national coverage and access to more customers through the awareness of the MFI brand and the higher customer flow through their out of town stores. Consumers' expenditure on the home is estimated to grow from 20.4% of total retail expenditure in 1991 to 29.0% in 2006. This compares to food and clothing which both decline as a percentage of total expenditure over the same period. The purchase of lifestyle enhancing sofas and other luxury products is an important part of this growth.