Retailer restructures as several locations face potential shutdowns due to losses
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The Original Factory Shop, a popular discount retailer, is undergoing significant changes as it prepares to close several of its locations. This decision comes as part of a broader strategy to cut costs and streamline operations in response to financial challenges.
Over the past two years, the chain has expanded rapidly, establishing a presence in numerous high streets across northern England and Scotland, often taking over former M&Co units.
Financial struggles lead to store closures
Despite its growth, The Original Factory Shop has encountered difficulties in maintaining profitability at some of its locations.
Reports indicate that several stores have not generated sufficient income, prompting the retailer to reevaluate its operational strategy. According to a recent article in The Press and Journal, the Invergordon store is set to close by the end of February, marking the beginning of a series of closures that may affect additional branches.
Ownership changes and their impact
The restructuring comes on the heels of a change in ownership, with Modella Capital, the new owners who also manage Hobbycraft, taking over from Duke Street Capital. This transition has raised concerns about the future of various stores within the chain. The Peterhead location, which opened not long ago, is already slated for closure in June, and the Nairn branch is also listed for rent, indicating that it may soon follow suit.
Company’s commitment to sustainability
A spokesperson for The Original Factory Shop confirmed the closures, emphasizing that the decision was not made lightly. They stated, “Closing stores is always a tough decision, and we are committed to keeping as many stores open as possible.” The spokesperson also noted that the future of other locations remains uncertain, as they are currently under review and dependent on negotiations with landlords. The company aims to build a sustainable business model that can withstand the challenges of the retail environment.
With branches in Inverness, Thurso, Stonehaven, Fraserburgh, Buckie, Oban, Stornoway, and Fort William, The Original Factory Shop is a familiar name in many communities. However, as the retailer navigates these turbulent waters, it remains to be seen how many stores will ultimately survive this restructuring phase.
