Around 400 jobs were under threat yesterday after an alliance enabling furniture retailer MFI to sell kitchens from Currys stores was scrapped.
MFI and Currys owner Dixons said they were halting their Hygena at Currys venture because sales growth had not been strong enough and all 130 concessions would be closed between July and September.
It follows a comprehensive review of the business and will lose MFI around £5 million in exit costs and wipe an additional £3 million from operating profits.
Customers were reassured that all orders would be honoured and after-sales service would continue to be provided once the business has shut down.
MFI chief executive John Hancock said the company was focused on supporting employees affected by the move. Consultations are due to begin and it is hoped many staff can be relocated to other parts of the business.
He said: "Hygena at Currys has been a worthwhile experience for both sides but we cannot justify continuing the partnership."
A spokeswoman for MFI declined to say how many employees in the Midlands may be affected.
The venture was set up in the autumn of 2000 and it is thought that margins from kitchen sales were not sufficiently high to be split between MFI and Dixons.
Its demise is the latest blow to MFI which blamed teething problems with a new supply chain management system for a sharp fall in 2004 profits.
In March, it told investors that bargain hunting by shoppers in the January sales was likely to eclipse improvements to the supply chain.
Mr Hancock said: "MFI continues to be the largest supplier of kitchens in the UK and we remain focused on improving the performance of our core UK retail businesses."
In addition to its UK retail arm, MFI has a significant presence in France and owns the Howden Joinery business.