Nearly 1,000 jobs could be threatened in the original factory shop (TOFs), one of the largest retailers of presentation in Great Britain, as part of a survival plan which focuses on the swinging plans for rent discounts.
Sky News learned that Modella Capital, the new owner of Tofs, has developed plans to renegotiate rents in 88 of the company’s 178 stores.
The proposals are contained in a voluntary arrangement of the company (CVA), a process of restructuring of the last MIL, which was launched on Thursday.
Tofs employees were reportedly informed of the plans.
The chain sells beauty brands such as the Oreal, the Adidas sports label and the DIY tools made by Black & Decker.
It employs approximately 2,000 people, with a proportion of its 176 employees in the head office and the warehouse that were faced with redundancy.
Creditors will be invited to vote on the plans at a meeting in mid-May.
The CVA is managed by Interpath Advisory.
Although there are no defined store closures, people familiar with the plans said that half of the succession of TOFs was in danger if the owners did not accept rent requests.
This is the second brutal restructuring of this type to be launched by a retailer belonging to Modella this week.
Sky News revealed on Tuesday that Hobbycraft, which also has it, also launches a CVA which would cause nine stores.
Hundreds of jobs could also be threatened if rent reductions are not completed.
The plan may become controversial for Modella and for Wh Smith, who has just acquired the sale of his street arm to the investment company.
The retail initiates believe that a similar restructuring is inevitable to Wh Smith, which, according to Modella, will be renowned in the city centers as TG Jones.
“In response to the difficult retail sales environment of last year, the state of original factory (TOFs) announced today a proposal for a voluntary provision of the company (CVA) in order to protect the future of TOF as a business and allow it to flourish in the future,” said a declaration of the company.
“Under the Tofs Plan, which will be subject to a vote of the company’s creditors on May 14, Tofs will adjust its succession of stores (if possible, by renegating leases on a certain number of its stores which are losses), will return to the actions centered on the agreement and the purchasing strategy for which it is famous, to invest in the online canals, and to realign its support operations and logistics.
“All employees have been informed of the CVA proposal.
“A redundancy consultation will start with employees in tofs stores where the company seeks to renegotiate the lease, in the event of the success of these negotiations.
“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 daily operation of the company during the implementation of this plan, and management will hold all the Tofs colleagues updated as the process continues.
“Although these changes are necessary, Tofs remains determined to serve our loyal customers through the United Kingdom.
“Our plan aims to put the company on a lasting basis, to protect as many jobs as possible and to allow us to return to the offer of exceptional value and to the offers that our customers expect from us.”
Tofs, founded in 1969, was bought by the investment company Duke Street in 2007.
Duke Street had already tried to sell the business, after having supported it through the COVVI-19 pandemic with a cash injection of more than 10 million pounds sterling.