The Original Factory Shop launches CVA, thousands of jobs at risk

Discount retailer The Original Factory Shop (TFOS) has officially proposed a company voluntary arrangement (CVA), potentially putting nearly 1,000 jobs at risk.

According to Sky News, the firm’s parent company Modella Capital, which acquired the company in February, launched the process on April 24 and, with it, has drawn up a plan to negotiate the rents of 88 of TOFS' 178 stores.

The move was confirmed to the media outlet in a statement from Modella, which said the proposed CVA, overseen by Interpath Advisory, intended to “protect the future of TOFS as a business and to allow it to flourish in the future”.

Creditors associated with the chain, which sells a number of beauty brands and sportswear labels, will be asked to vote on the plans in a meeting during May, the statement added.

TOFS noted that all employees have been informed of the proposal, with redundancy consultations to soon begin with those working at impacted locations. A number of employees at TOFS’ head office and warehouse in Burnley will also be affected.

The statement continued: "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 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."

FashionUnited has contacted Modella Capital and Interpath Advisory with requests to comment.