UK Discount Chain The Original Factory Shop Enters Administration, 139 Stores at Risk

The Original Factory Shop (TOFS), a beloved UK discount retailer operating since 1969, has officially entered administration, placing 139 of its stores at risk of closure. This development threatens the livelihoods of approximately 1,220 employees nationwide. The move follows an announcement of significant stock clearance sales, with discounts ranging from 50% to 70%, available both online and in physical stores.

Late last year, TOFS, along with fashion accessories chain Claire’s, filed for administration after their owner, investment firm Modella Capital, conceded that last-ditch rescue efforts had failed. Combined, the two chains employ around 2,500 people across the UK and Ireland, many of whom now face potential redundancy. Specifically, 1,355 staff at 154 Claire’s outlets and 1,220 workers at 140 TOFS stores are impacted.

In response to the administration, TOFS is offering discounts on a wide variety of stock, including branded electricals, footwear, beauty products, and leftover Christmas items, with free delivery on orders over £50.

A spokesperson for Modella Capital said, “Very sadly, we have had to initiate insolvency proceedings for The Original Factory Shop. Despite intensive efforts and last-ditch attempts to save the business, there is no realistic way for TOFS to trade profitably again. Under these circumstances, administration is the only option.”

The challenges leading to TOFS’s administration include high cost inflation, fragile consumer confidence, and increasing labour costs driven by government policies. These factors have made trading conditions extremely difficult, not only for TOFS but many retailers on Britain’s high streets. The firm emphasized that these pressures have left many established and cherished businesses vulnerable.

Modella Capital acquired TOFS in February and had also purchased over 150 Claire’s stores the previous year. However, the latter experienced widespread closures, with only 15 stores retained after parts of the business were excluded from the transaction. Claire’s UK and Ireland operations entered administration following bankruptcy proceedings in the United States.

Modella Capital has been notably active in UK retail recently, acquiring WH Smith’s high street stores and taking control of arts and crafts retailer Hobbycraft in early 2024. Despite these efforts, the retailer acknowledges the severe challenges currently facing the sector, warning that without profitability, more closures and job losses may follow.