Original Factory Shop rescue deal will mean store closures

By

Sandra Halliday

Published
Apr 30, 2018

The backers behind The Original Factory Shop (TOFS) are putting together a rescue deal for the value chain that will mean some stores could close.

The company currently has 220 stores but its private equity owner Duke Street Capital doesn't see the chain in its current form as viable. It wants to trim down store numbers, negotiate lower rents on others and will pump in £10 million to finance the business if it can achieve its aim.

It becomes the latest chain so far this year to be planning store closures as UK shoppers rein-in their spending and shift online at speed. New Look is the highest profile fashion name to be planning a large number of closures, but the TOFS plan might rival that, we just don't know yet.

The Burnley-based chain of discount department stores has struggled to boost profits despite turnover rising. In its last financial year, it reported turnover up to £190 million from £185 million and gross profits up to £85.5 million from £83.5 million. But the important figure for pre-tax profits, plummeted by 33% to just £4.74 million.

The Telegraph reported a source close to the company saying: “They are looking at a range of options for the business, including raising new capital for growth. No decision has been made as to the direction this will all take.”