The future of a popular high street discount shop remains uncertain as stores up and down the UK are at risk of closing their doors for good. Owners of The Original Factory Shop (TOFS), Modella Capital, has drawn up plans for a radical restructuring which could include axing stores. 

The private equity firm has drafted in crucial advisors to explore various options for the chain, which includes a company voluntary arrangement (CVA). Interpath has reportedly been engaged to work on the plans, Sky News reports. A CVA will be examined with the expectation that underperforming stores will be closed, as well as forcing through rent cuts on others.

Companies often turn to this arrangement to prevent insolvency which could otherwise result in the collapse of the business entirely. TOFS distribution centre is also thought to be a key component in the proposals for potential restructuring.

Any store closures would also lead to a significant number of job losses among TOFS’ workforce, which is estimated to consist of 1,800 employees. 

The major plans come just weeks after Modella Capital took control – the company also has its eye on WHSmith’s high street business as it stands as one of two remaining parties in discussion of buying it.

TOFS was put up for sale for the second time last year under its previous ownership as it struggled to secure a buyer. 

After being founded in 1969 by the Black family, the chain was acquired by private equity firm Duke Street Capital in 2007, having gone under various changes and closures to adjust to the real landscape.

It initially sold surplus soap yet branched out into a diverse selection of goods over time. 

The retailer expanded rapidly, reaching over 180 stores by 2011 and expanding its Burnley headquarters and warehouse to keep up with demand. 

Details surrounding the plot of the restructuring remains unclear, including the timeline for initiating a CVA which required approval from both court and creditor.