Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We use cookies to personalise your experience; learn more in our Privacy and Cookie Policy. You can opt out of some cookies by adjusting your browser settings; see the cookie policy for details. By using this site, you agree to our use of cookies.

The Original Factory Shop CVA approved

Creditors have approved a proposed Company Voluntary Arrangement for The Original Factory Shop (TOFS).

The plans will see 32 stores and a distribution centre close, and new investment ploughed into the troubled firm by its private equity owner Duke Street.

According to a spokeswoman the CVA approval promised to put ”the business on a much stronger, financial footing to deliver the turnaround plan. While this is a tough measure, reflective of the broader retail environment, it is good news that TOFS will be in pole position to push ahead with their new journey to growth strategy.”

TOFS will move to monthly rents and rent reductions will be active from 1 August.

Last month Drapers revealed the list of stores earmarked for closure

The document seen by Drapers showed TOFS posted a 3.7% fall in revenues for the year to 30 April to £183.2m. EBITDA stood at £6.2m, down from £12m in 2017.

The CVA document stated that the company had net liabilities of £286m, which would be reduced to £230m if some of the loan notes are written off, and had been underperforming “for some time”.

The company had stated that: “The business has been underperforming for some time but this has become more marked in the past 12 months. For the year ended 31 March 2018 (FY18) the company’s turnover was 4% behind that for the year ended 31 March 2017.

“Trading performance has deteriorated significantly during 2017 and early 2018 and this has led to liquidity pressures and breach of banking covenants. The decline in performance has been the result of both the macro-economic factors and business-specific issues affecting the company.”




Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.