Landlords of main low cost retailer brace for swingeing lease cuts

The brand new proprietor of The Unique Manufacturing facility Store (TOFS), considered one of Britain’s main impartial low cost retailers, is making ready to unveil a package deal of savage lease cuts for its retailer landlords.

Sky Information understands that Modella Capital – which just lately agreed to purchase WH Smith’s excessive road arm – is finalising plans for an organization voluntary association (CVA) at TOFS.

Metropolis sources mentioned the CVA – which requires courtroom approval – could possibly be unveiled inside days.

Property sources cited business rumours that vital retailer closures and job losses might type a part of TOFS’ plans, whereas calls for for two-year rent-free durations at some outlets are mentioned to additionally characteristic.

Modella, which additionally owns Hobbycraft, purchased TOFS from its earlier proprietor, Duke Avenue Capital, simply two months in the past.

Nearly instantly, it engaged restructuring specialists at Interpath to work on the plans.

Sources have speculated that dozens of TOFS shops might shut below a CVA, whereas a significant distribution centre can be thought to characteristic within the proposals.

Any so-called ‘landlord-led’ CVA which triggered retailer closures would inevitably result in job losses amongst TOFS’ workforce, which was mentioned to quantity about 1,800 folks on the time of the takeover.

TOFS, which sells magnificence manufacturers resembling L’Oreal, the sportswear label Adidas and DIY instruments made by Black & Decker, trades from about 180 shops.

The chain, which was based in 1969, was purchased by the non-public fairness agency Duke Avenue in 2007.

Duke Avenue had tried to promote the enterprise earlier than, having supported it by means of the COVID-19 pandemic with a money injection of greater than £10m.