Three West Midlands stores at risk as The Original Factory Shop launches last-ditch restructuring plan
A clothing chain with three stores in the West Midlands could be set to close nearly half of its UK stores under restructuring plans.
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Modella Capital, the new owner of The Original Factory Shop (TOFS), has reportedly drawn up measures to renegotiate rents at 88 of the company's 178 stores as part of a restructuring process.
No stores have been officially identified for closure as part of the scheme, which will be voted on by creditors at a meeting in May. The company operates outlets in Bridgnorth, Whitchurch and Market Drayton.
"In response to the challenging retail environment of the last year, The Original Factory Shop (TOFS) has today announced a proposed Company Voluntary Arrangement (CVA) in order to protect the future of TOFS as a business and to allow it to flourish in the future," said a statement from the company.
"Under TOFS' plan, which will be subject to a vote by the company's creditors on May 14, TOFS will adjust its store estate (by, where possible, renegotiating the leases on a number of its stores that are loss-making), return to the deal-centric stock and purchasing strategy it is famous for, invest in online channels, and re-align its support centre and logistics operations."
The statement added that there would also be a reduction in the number of employees in the company's head office in Burnley.
The firm was founded in Lancashire in 1969 and purchased by priivate equity firm Duke Street in 2007. It employs around 2,000 people.
London-based investment group Modella bought TOFS from previous owners Duke Street in February, for an undisclosed sum.
"All employees have been informed of the CVA proposal," the statement added.
"A redundancy consultation will begin with employees in those TOFS stores where the company is seeking to renegotiate the lease, in the event that those negotiations are not successful."
The firm also launched plans to close stores and cut jobs at Hobbycraft, another brand owned by the group, earlier this week.
In March, WH Smith also revealed it would be selling its 480 high street stores to Modella in a deal worth £76m, with all stores set to be renamed TG Jones fiollowing a "short transitional period".
