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

The Original Factory Shop (TOFS), a beloved UK discount retailer that has served customers since 1969, has entered administration, putting 139 of its stores at risk of closure. This development follows the company’s recent financial struggles and has led to significant stock clearance sales with discounts between 50% and 70%, available both online and in-store.

The retailer’s financial situation deteriorated after filing for administration late last year, impacting all 160 outlets nationwide. Earlier this month, it was revealed that both TOFS and Claire’s, their sister brand, had joined the administration list after the failure of “last-ditch” rescue attempts made by their owner, investment firm Modella Capital. This crisis collectively threatens approximately 2,500 jobs across the UK and Ireland.

Modella Capital acquired TOFS in February and Claire’s in the previous year, following prior restructuring efforts. Despite these attempts, 1,220 employees at TOFS stores and 1,355 staff across Claire’s 154 UK and Ireland locations now face potential redundancy.

In response to the administration, TOFS has launched discounted sales on various items including branded electrical goods, footwear, beauty products, and excess seasonal stock. Customers can also benefit from free delivery on orders over £50.

A spokesperson from Modella Capital expressed regret over the decision, stating: “Entering administration was a very difficult but necessary step. After intensive efforts to save the business, it became clear that TOFS could not operate profitably in the current market conditions.”

The administrators cited a combination of adverse factors leading to the company’s struggles: high inflation, weak consumer confidence, rising labor costs influenced by government policies, and overall tough trading conditions on the UK high street.

This recent announcement follows similar challenges faced by Claire’s, which also filed for administration after a bankruptcy filing in the US. Modella Capital, a significant player in British retail, has recently expanded its portfolio by acquiring high street operations of WH Smith and arts and crafts retailer Hobbycraft.

The uncertain future of TOFS serves as a stark example of the difficulties traditional retailers face amid ongoing economic pressures and evolving consumer habits.