The Original Factory Shop Faces Administration, Putting 1,200 Jobs at Risk
The Original Factory Shop (TOFS) is set to enter administration, risking approximately 1,200 jobs. Reports indicate that the discount retail chain, acquired by Modella Capital last year, is poised to appoint Interpath as its administrator this Wednesday afternoon.
Overview of The Original Factory Shop
Founded in the late 1960s, TOFS operates around 130 stores across the UK. The company has faced mounting financial pressure, prompting Modella Capital to file a notice of intention to appoint administrators earlier this month. There have been ongoing discussions about a potential sale of the business, although industry experts express doubt about finding a viable buyer.
Recent Developments
- TOFS appointment of Interpath for insolvency management expected by Wednesday afternoon.
- Modella Capital has already sought options for selling the business.
- TOFS is the second major retailer to face collapse this week, following Claire’s.
On Monday, Claire’s, also owned by Modella, appointed Kroll as administrator, impacting about 1,300 jobs in the UK and Ireland. This wave of distress in retail underscores significant challenges in the sector, attributed to various factors such as government policies and landlord demands.
Challenges Facing TOFS
The difficulties encountered by TOFS include:
- Government policy impacts.
- Landlords reclaiming prime retail locations.
- Poor transition to a new logistics provider.
As the retail environment becomes increasingly challenging, companies like Poundland have also shuttered numerous locations. Modella, which also manages WH Smith’s high street properties under the TG Jones brand and Hobbycraft, has not provided comments regarding these developments.
The upcoming administration of TOFS highlights a tumultuous period for UK retailers, underscoring the vulnerabilities within the sector.
