The Original Factory Shop launches survival plan with hundreds of jobs put at risk
Nearly 1,000 jobs could be at risk at The Original Factory Shop as its new owner pursues a survival plan for the business.
According to Sky News, owner Modella Capital is planning to renegotiate rents for 88 of the discount chain’s 178 stores.
The proposals are laid out in a company voluntary arrangement (CVA) which was launched on 24 April.
The Original Factory Shop employs around 2,000 people who have been briefed on the plans. The retailer has also launched a consultation with store staff who may be affected in case the rent negotiations are unsuccessful.
Never Miss a Retail Update!Some of The Original Factory Shop’s head office and warehousing employees could also be facing redundancy.
In a statement, the company said: “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.
“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.
“All employees have been informed of the CVA proposal.
“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.
“There will also be a reduction in the number of employees in the company’s head office and warehouse in Burnley.
“There will be no change in the day-to-day running of the business while this plan is implemented, and management will keep all TOFS colleagues updated as the process continues.
“While these changes are necessary, TOFS remains committed to serving our loyal customers across the UK.
“Our plan aims to put the business on sustainable footing, protecting as many jobs as possible, and allowing us to return to offering the exceptional value and deals our customers expect from us.”
