The Original Factory Shop owner eyes sale after bid approaches

23 June 2022, 12:56 | Updated: 23 June 2022, 15:03

The Original Factory Shop (TOFS), the discount retailer, is exploring a sale after receiving a number of takeover approaches.

Sky News understands that Duke Street, TOFS' owner since 2007, has instructed long-standing advisers at Deloitte to field interest in a deal.

The company, which trades from about 180 stores across the UK, is not running a formal sale process and had not been planning to launch one until next year.

Retail sources said, however, that a sale prior to that point was now a possibility, with a number of other industry players said to have expressed interest in a deal.

The likely value of TOFS in any deal was unclear.

TOFS sells brands including Adidas, Calvin Klein, Jimmy Choo, L'Oreal and Under Armour at substantial discounts to their recommended retail price.

In 2018, the company closed approximately 30 stores through a restructuring process called a company voluntary arrangement.

That deal cleared the way for rent cuts as Duke Street sought to put TOFS on a more sustainable financial footing in an environment where physical store-owners have long-complained that the business rates regime has left them unfairly disadvantaged against online rivals.

TOFS was established in 1969 and employs more than 1,500 people.

It last changed hands in 2007, when Duke Street bought the company for £68.5m from the private equity arm of Barclays.

That 15-year duration is an unusually long one by the standards of private equity firms.

The business is chaired by Alistair McGeorge, the former Matalan boss.

An industry analyst said that TOFS was likely to be attractive to buyers at a time when inflationary pressures are driving consumers to value-driven retail offerings.

Duke Street declined to comment.