Value store group Original Factory Shop has been sold to private equity giant Duke Street Capital for £70 million.
The deal comes three years after Barclays Private Equity bought a 70 per cent stake in the company for just£18.5 million.
Original Factory Shop chief executive George Foster said he was “very excited about the future prospects for the group”.
The new owner is expected to accelerate the group’s expansion plans. The retailer unveiled an ambitious£10 million expansion programme earlier this year, with the aim of opening 15 outlets a year over the next three years.
Original Factory Shop has 84 stores in smaller towns selling discount household goods, toys, electricals and clothing.
Duke Street partner Tim Lebus said: “The long-term prospects for the value sector are excellent.”
In the six months to September 30, the retailer’s profits climbed 15.9 per cent on total sales up 15.6 per cent. Its like-for-likes rose by 4.8 per cent over the period. In October, Foster said: “Our format is working well. We have a wide range and are regularly visited by locals – about 80 per cent of people who visit us buy something.”
Retail Knowledge Bank senior partner Robert Clark said: “The sale is an injection of funds to take the operation forward. But it is interesting timing – why are they doing it now? Duke Street must have driven a fairly hard bargain. However, it is the logical way for a medium-sized company to progress with a format they want to roll out.”
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