TOFS places hundreds of jobs at risk under new revival plans

Nearly 1000 jobs at The Original Factory Shop (TOFS) reportedly could be at risk as the company embarks on a survival plan which hinges on widespread rent cuts, according to Sky News. Modella Capital, the new owner of TOFS, has reportedly drawn up plans to renegotiate rents at 88 of the company's 178 stores. Currently, the brand employs about 2,000 people, with a proportion of its 176 head office and warehouse employees understood to be facing redundancy. Although there are no definite store closures, people familiar with the plans said half of the company’s estate was at risk if landlords did not agree to the rent demands. The proposals are contained in a company voluntary arrangement (CVA), a last-ditch restructuring process, which was launched on Thursday. Employees of The Original Factory Shop are said to have been briefed on the plans. The CVA is being handled by Interpath Advisory and creditors will be asked to vote on the plans at a meeting in mid-May. This news follows reports that Hobbycraft, which Modella also owns, is launching its own CVA which would entail the closure of nine shops. Hobbycraft said the store closures and restructure intend to help secure the future of at least 99 of its stores and 1,800 jobs across the business. The nine impacted stores include: Bagshot, Basildon, Borehamwood, Bristol's Imperial Retail Park, Canterbury, Cirencester, Dunstable, Epping Forest and Lakeside Shopping Centre in Essex. The company told Sky News: "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," a statement from 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.” The statement added: "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.” Modella has been contacted for comment.

TOFS places hundreds of jobs at risk under new revival plans

The CVA is being handled by Interpath Advisory and creditors will be asked to vote on the plans at a meeting in mid-May.

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