High street chain with 178 shops puts ANOTHER store up for sale ahead of three more branches shutting

The Sun

20-05-2025

A MAJOR discount store with 178 shops has put one site up for sale ahead of closing three more stores.
The landlord of The Original Factory Shop (TOFS) in Nairn, Scotland, has listed the site for sale.
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The retail unit is already listed for sale on the TSA Property Consultants website, suggesting it is likely to close soon.
This follows news that another TOFS location in Peterhead, Aberdeenshire, has been listed for rent.
Staff at the Peterhead store told The Press and Journal that it is expected to shut in June.
These developments come just weeks after TOFS' owner, Modella Capital, launched a restructuring effort to renegotiate rents at 88 of its stores.
Despite these efforts, the retailer has confirmed that two more stores, in addition to the Peterhead location, will be closing in the coming weeks.
Its site in Market Place, Staveley, Derbyshire is set to close permanently on July 12.
The announcement, shared on the store's Facebook
"The Original Factory Shop Staveley has served you for 20 years and will be closing its doors for the final time on the July 12."
TOFS' store on Charles Street, Milford Haven, has also announced its closure with the launch of a 30% off closing-down sale.
A post on Facebook read: "Closing down sale now on in store!
Why are shops closing stores?
"Up to 30% across all items."
Its unclear when this store will pull the shutters down for the final time.
A spokesperson for The Original Factory shop told The Press and Journal: "The Original Factory Shop (TOFS) recently confirmed that as part of a restructuring a number of its loss-making stores will have to close.
"Closing stores is always a tough decision and we are committed to keeping as many stores open as possible.
"This is, however, dependent on successful negotiations with landlords as we strive to build a sustainable and successful business for the future.
"We have already announced that two stores will close.
"Additionally, a small number of other stores are currently under review, with their continued operation subject to ongoing negotiations with landlords."
While many bargain stores such as B&M and Home Bargains have seemed to profit from the cost of living crisis, The Original Factory store has struggled to stay afloat.
Duke Street Capital, which had owned the company since 2007, attempted to offload the business in 2023 through Deloitte, but a deal never came to fruition.
In February, TOFS was eventually sold to private equity firm Modella Capital, which also owns Hobbycraft and WHSmith 's high street stores.
What's happening at TOFS?
Modella Capital, the new owner of the Original Factory Shop, drew up plans to initiate a company voluntary arrangement (CVA) at the end of April.
Companies often turn to a CVA as a means to stave off insolvency, which could otherwise result in store closures or the collapse of the entire business.
A CVA provides struggling firms with an opportunity to explore strategies to safeguard their future, such as negotiating reduced rent rates with landlords.
For TOFS, this involves trying to renegotiate rents at 88 of its 178 stores.
However, it's important to note that landlords don't have to agree to reduced rents.
If an agreement cannot be reached, TOFS may be forced to close stores, which would unfortunately result in job losses. For now, the future remains uncertain.
The retailer has also shuttered more than a dozen stores over the past 12 months.
History of The Original Factory Shop
FOUNDED in 1969 by the Black family in Keighley, the first shop was part of Peter Black's retail network.
Initially, it focused on selling surplus soap produced by one of Black's factories, offering local communities great value.
Over the years, TOFS evolved from its humble beginnings, expanding its product range to include clothing, homeware, beauty products, toys, and more.
It became known for offering a diverse selection of well-known brands at discounted prices.
The company grew steadily, reaching 185 stores by 2011 and expanding its headquarters and warehouse in Burnley to accommodate its increasing needs.
In 2007, the chain was acquired by private equity firm Duke Street Capital.
Since then, TOFS has undergone various transformations, including store closures and openings, as it adapted to the changing retail landscape.
In February 2025, Modella Capital, the owner of Hobbycraft, acquired TOFS.
Hard times for discount stores
Store closures are indicative of the harsh retail climate which has plagued high streets up and down the UK in recent years.
Rising costs, coupled with shoppers tightening their purse strings, have placed pressure on businesses and damaged sales.
Bargain retailers such as B&M and Home Bargains have performed better than others thanks to their low price point, but this has created rivalry.
However, much like TOFS, Poundland is also grappling with challenges to remain competitive in the market.
The discount retailer, owned by Pepco, enlisted advisory firm Teneo earlier this month to manage the potential sale of its business.
A significant number of stores could be axed as part of the proposed sale, reports say.
It comes after Pepco said it was looking at "all strategic options" to separate Poundland from its brand.
The Polish group said it might turn its focus to its more profitable businesses in Europe.
Pepco previously warned that hikes to employer national insurance contributions (NICs) and national minimum wage would significantly add to its costs.
Chancellor Rachel Reeves said during her autumn statement last year that she would raise employers' NICs from 13.8% to 15%.
She also announced a reduction to the threshold at which businesses start paying NICs from £9,100 to £5,000.
It's estimated that the move will raise £25billion, costing the equivalent of around £800 per employee for businesses.
Late last year, it was revealed that profits at Poundland also tumbled by £641million in the year to September, with bosses again blaming slow sales amid a poor outlook thanks to measures set out by Reeves.
The firm is not the only business to have warned of these challenges.
The move has been blasted by a number of high street stores including Greggs, Sainsbury's, Next and Halford s, which all said it could force them to raise prices and further bruise the industry.
Why are retailers closing shops?
EMPTY shops have become an eyesore on many British high streets and are often symbolic of a town centre's decline.
The Sun's business editor Ashley Armstrong explains why so many retailers are shutting their doors.
In many cases, retailers are shutting stores because they are no longer the money-makers they once were because of the rise of online shopping.
Falling store sales and rising staff costs have made it even more expensive for shops to stay open.
The British Retail Consortium has predicted that the Treasury's hike to employer NICs from April 2025, will cost the retail sector £2.3billion.
At the same time, the minimum wage will rise to £12.21 an hour from April, and the minimum wage for people aged 18-20 will rise to £10 an hour, an increase of £1.40.
In some cases, retailers are shutting a store and reopening a new shop at the other end of a high street to reflect how a town has changed.
The problem is that when a big shop closes, footfall falls across the local high street, which puts more shops at risk of closing.
Retail parks are increasingly popular with shoppers, who want to be able to get easy, free parking at a time when local councils have hiked parking charges in towns.
Many retailers including Next and Marks & Spencer have been shutting stores on the high street and taking bigger stores in better-performing retail parks instead.
In some cases, stores have been shut when a retailer goes bust, as in the case of Carpetright, Debenhams, Dorothy Perkins, Paperchase, Ted Baker, The Body Shop, Topshop and Wilko to name a few.
What's increasingly common is when a chain goes bust a rival retailer or private equity firm snaps up the intellectual property rights so they can own the brand and sell it online.
They may go on to open a handful of stores if there is customer demand, but there are rarely ever as many stores or in the same places.
The Centre for Retail Research (CRR) has warned that around 17,350 retail sites are expected to shut down this year.