The Original Factory Shop has weathered a few storms in its 57 years, not limited to 50 store closures in a CVA in 2019.
But the latest has tipped it over. Last week, the variety discounter was unceremoniously plunged into administration, putting 137 stores and about 1,200 jobs at risk.
So, what went wrong?
Rewind to 2024 and TOFS had dipped to an operating loss of £1.6m in the year to 31 March, down from £860,000 profit.
At that time, it wasn’t yet owned by Modella Capital. The UK private equity firm nearly bought the chain in 2023, engaging in talks with Deloitte, advisor to then owner Duke Street. But TOFS had recently acquired about 40 new stores, including former M&Co sites, and there were concerns it had taken on too many, at too high a premium. Modella bailed.
By late 2024 the demands of re-stocking those stores were indeed making cashflow tight. When Duke Street went back to market – this time advised by Teneo – Modella swooped in, pipping Baaj Capital to the post with a promise of £3m immediate funding.
Modella’s moves
Modella was still a new name, co-founded in 2023 by its chairman Steve Curtis, a one-time HMRC tax assistant and Co-op head of loss prevention who entered turnaround investing at Gordon Brothers in 2006. The other co-founders are Modella MD Joseph Price, formerly of Kroll and AlixPartners, and Jamie Constable, founder of investment firm Rcapital and CEO of Modella parent Hay Wain Group.
By then Modella had made its first retail acquisition (picking up Hobbycraft in August 2024) and its purchase of TOFS in February 2025 was seen by management as being the best possible outcome.
The promised £3m was provided as a loan from Modella’s sister company Deasil Limited. TOFS also renewed a £12m asset-backed loan for four years, with availability initially capped at £7m. Modella’s deal included a new CVA which kicked off in April – the same month Milton Guffogg, retired founder of Modella’s stock clearance sister company Retail Realisation, was brought in as TOFS chairman.
At that point, TOFS had roughly 180 stores, about 60 of which stopped paying rent under the CVA. Landlords were given the option to terminate leases, while around 100 stores would also pay no rates until March 2026.
But an agreement could not be reached with the landlord of its Burnley distribution centre. By July, TOFS’ head office had been relocated to Bolton (rent-free for 11 months), and logistics delegated to Unipart, following a tender process.
Availability woes
Accounts of what caused the subsequent availability issues differ. Unipart, which declined to comment on specifics, is said to have set up its warehouse sub-optimally for TOFS’ range. But it is also said to have had only three days between contract signing and picking commencing. Systems were clearly not talking to each other.
In weeks when stores should have been getting 30 pallets, some were getting just two. Loyal shoppers were keeping average basket value in positive territory, but too many others were seeing gaps and leaving. LFLs were down 20%-30%.
Modella started 2026 by posting a notice of intention to appointment administrators for both TOFS and Claire’s, the latter acquired in September 2025. Modella cited weak high street footfall. In both cases, Retail Realisation has been appointed by administrators to clear stock, after a tender process.
Interpath, TOFS’ administrator, is talking to a bidder for 70 stores, with potential to keep staff on.
TOFS workers may not be the only ones watching with trepidation. Modella also bought WH Smith’s high street stores in June last year, rebranding them as TG Jones. The deal prohibits a CVA or mass closures for the first year. Beyond that though, no guarantees have been given.
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