The Original Factory Shop (TOFS) is set to close stores in York, Brighton, Aylesbury and Dumfries, blaming poor trading conditions for its Company Voluntary Arrangement, Drapers has learned.
Documents seen by Drapers show the firm has listed 32 stores and a depot for closure under details of the CVA proposal.
The retailer revealed it posted a 3.7% fall in revenues from £190.2m for the year to April 2018 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 said: “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.”
The CVA splits the estate portfolio into three categories, A, B and C, with C stores to close, B stores to be subject to a rent haircut, and A stores to be unaffected by the proposals.
Category B leases are split into three sub-categories with B1 leases seeing a 20% rent reduction for 36 months, B2 leases seeing a 40% reduction and B3 leases facing a 60% reduction in tent.
The documents show that 48 stores are listed as category A, with 20 in B1, 67 in B2, 41 in B3 and 32 stores and a depot to close.
The company has also offered to pay 5% of passing rent in lieu of dilapidations.
The proposals state that the firm would move to monthly rents and rent reductions would be active from 1 August.
The full list of stores to close is as follows:
Aylesbury, Bargoed, Barry, Bearwood, Brighton, Buckley, Bury St Edmunds, Catterick Garrison, Church Stretton, Colywn Bay, Dumfries, Frome, Helston, Lockerbie, Maesteg, Morpeth, Oswestry, Penicuik, Perth, Pontarddulais, Ramsey, Salisbury, Sheeness, Stockbridge, Tredegar, Walsall Wood, Wantage, Welling, Whitley Bay, Wick, Woodseats, York and a depot in Penrith.