Hundreds of jobs potentially at risk at The Original Factory Shop

This could put nearly 1,000 jobs under threat at The Original Factory Shop (TOFS), which has 178 stores around the country.

The report says that the plans were outlined in a compulsory voluntary agreement (CVA), which is when a company proposes a restructuring plan to its creditors.

No stores are earmarked for definite closure, according to Sky News, but people familiar with the plans said that stores were at risk if landlords did not accept rent cuts.

This follows news that fellow Modella Capital-owned retailer Hobbycraft was looking to close nine stores and reduce staff count by around 100.

“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,” the company said.

“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 a 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.”