The Original Factory Shop close to acquisiton by Baaj Capital
The family business behind In The Style is poised to acquire The Original Factory Shop (TOFS), the independent discount retail chain owned by private equity firm Duke Street since 2007.
Sky News reports that Baaj Capital, which also invests in party supplies group Amscan International, is reported to be the frontrunner in the potential acquisition of TOFS. Industry sources suggest that while no agreement has been finalised, a deal could be completed within days and announced as early as next week.
Competing bidders for the business are said to have included Mike Ashley's Frasers Group and Poundstretcher, owned by the investment group Fortress. However, the terms of Baaj Capital’s proposed purchase remain undisclosed.
Founded in 1969, TOFS operates more than 180 stores across the UK, offering products from well-known brands such as L’Oréal, Adidas, and Black & Decker. Duke Street, which supported the retailer with a £10 million investment in 2018, has owned the chain for 17 years.
Back in 2018, TOFS had its Company Voluntary Arrangement (CVA) approved by creditors, resulting in the planned closure of approximately 10% of its stores and placing numerous jobs at risk.
As part of the CVA, TOFS shuttered 32 of its 224 stores and implemented rent reductions across the remaining locations. The retailer also closed its distribution centre as part of the restructuring.
At the time, a TOFS spokeswoman said that the CVA approval would put "the business on a much stronger, financial footing" to achieve its turnaround plan. “While this is a tough measure, reflective of the broader retail environment, it is good news that TOFS will be in pole position to push ahead with their new journey to growth strategy,” she said.
Prior to its CVA being launched, TOFS saw its credit insurance pulled by Euler Hermes following news of planned stores closures. TOFS is now believed to be free of bank debt.
Neither TOFS nor Baaj Capital have responded to request for comment.