The Original Factory Shop to shut 32 stores in CVA

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The Original Factory Shop CVA

The Original Factory Shop (Tofs) has launched a CVA proposal in the latest casualty to hit the high street, aiming to shutter more than 10 per cent of its stores.

According to Retail Week, the embattled budget retailer is proposing to close 32 of its 224 stores while reduce rents on the rest.

Its owner Duke Street has also negotiated a £10 million emergency cash injection deal with its lenders, although this is subject to a reduction in costs being achieved.

Earlier this month Tofs saw its credit insurance pulled by Euler Hermes following news in April of planned stores closures.

Last year the discount retailer reported a profit drop of £3.1 million, despite turnover rising by £5 million to £190 million.

Its rents are understood to be its biggest stumbling block, and Tofs said its CVA should mean it will be “well positioned to delivery on the new growth plan”.

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3 COMMENTS

  1. It is far too easy to blame high rents, however this retailer in particular has wasted an extortionate amount of money on vanity projects, upgrading and re-branding the stores with little or no ROI, knowing all the time that underlying cashflow could not support such type of investment. There are some serious questions to be asked of Alistair McGeorge and Emma Fox for ploughing ahead on this journey, whilst ultimately putting real peoples jobs at risk. Yes, the High St is under pressure but actually The Original Factory Shop has scored some own goals here.

  2. Rebranding can be an essential part of marketing which is difficult to quantify in terms of ROI, but for a “budget brand” to introduce the logo “tofs” is simply confusing. What are they trying to say?

  3. The Original Factory Shop spent so much money on re-branding the business to TOFS for Emma (CEO) to come in and change it back to The Original Factory Shop they have not thought about the staff out there that could loose their jobs over this. I’ve never worked for a company that waste so much money. We have at least 2 Conferances a year putting all managers up in hotels for at the end of the day could have been put into a presentation within an area meeting, they send lots of POS that goes straight in the bin as it’s too much, the drive around in flash expensive cars they need to sort head office out before effecting stores!

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