Struggling MFI Furniture group says up to 1,470 jobs are at risk with its decision to get out of the bathrooms and sofas range.

The news came as it announced a recovery plan after poor sales wiped out annual profits.

The firm, which recently sold its French Hygena chain and won an asset-backed £150m loan facility to help it restructure, said it made a pre-tax loss of £600,000 for the year.

That was better than analysts had expected - they were predicting a loss of around £4.6m.

Investors had been prepared for a loss after MFI issued a profits warning in October - the fourth in 12 months.

As well as giving up bathrooms and its Sofa Workshop chain, MFI is to close at least 11 of its 195 stores and three of its eight depots.

It plans to save money by buying in more products, thus cutting in-house manufacturing by 25%.

Instead, it is to concentrate on selling higher-margin kitchens and bedroom furnishings - although with a smaller range - with the loss of up to 370 jobs.

In total, the restructuring will cost £34m in 2006 with asset write-offs of £36m.

Shares leapt 6.2% on the news, having hit a five-year low in December.- [ananova.com]

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