Trading Update

MFI Furniture Group PLC
09 September 2004


9 September 2004

                            MFI Furniture Group Plc
                                 Trading update

Since the interim results statement in July, UK Retail has experienced
significant issues with the newly implemented supply chain system.  This has led
to an unexpected shortfall in the Group's ability to deliver orders as planned.
Following completion of an internal review yesterday, we have made an assessment
of the financial impact on the business.  The difficulties experienced in
customer deliveries have impacted both margins and sales dispatches.  Margins
are being negatively affected through the costs of remedial work with customers
and the costs being incurred to address the ongoing systems issues.

The important August bank holiday promotion finished yesterday and orders,
whilst in line with last year, were slightly below expectations. Margins were
also adversely impacted by sales mix within the kitchen category.

Taking these factors into account and the competitive pressures on pricing, the
Board now believes that UK Retail will show a substantial loss for the current
financial year.

Howdens has continued to perform strongly, making further gross margin progress.
While the important Autumn trading period is still to come, the business is
slightly ahead of market expectations.

Nevertheless, the Board now believes that Group profit for the second half of
the current financial year will be materially below that reported for the first
half.

We believe we have identified the key issues with our systems and are working to
resolve them as soon as possible. Our focus is to improve radically the service
to our retail customers.  The new system was put in place to make a step change
in the level of customer service and we remain determined to achieve these
benefits.

Our priority is to restore the profitability of the UK Retail business. We will
continue to invest in Howdens in the UK and internationally. We will update the
market as we progress.

Total orders for the Group for the period from Boxing Day 2003 to date are shown
below:

         Ist half orders   2nd half YTD orders   Total YTD orders   Same store YTD orders
Howden        
Joinery       26%                   22%                24%                     19%
UK           
Retail       (7)%                  (5)%               (6)%                    (7)%
France        
Retail        15%                   5)%                 8%                      8% *
Group          3%                    4%                 3%                      1%

                                                             * in local currency

Enquiries:

Until 10.30am   John Hancock           Chief Executive           020 7404 5959
                Martin Clifford-King   Chief Financial Officer   020 7404 5959

After 12 noon   John Hancock           Chief Executive           020 8913 5319
                Martin Clifford-King   Chief Financial Officer   020 8913 5350

All day         Susan Gilchrist        Brunswick                 020 7404 5959
                Anna Jones             Brunswick                 020 7404 5959




                      This information is provided by RNS
            The company news service from the London Stock Exchange
           IIAIIAIIS