Discount department store retailer The Original Factory Shop has reported a decline in sales as well as widening losses.
According to its latest filed accounts for the year ended 31 March 2024, total sales fell 1% to £117.5m from £118.7m in 2023.
EBITDA stood at £1.6m, down from £4.6m, while pre-tax losses resulted at £5.6m, widening from a loss of £1.7m the previous year.
Stated within its report, the company said: “Gross profit margin continued to increase and saw a rise of 1.2% from FY23 (to 51.3%). Average basket value (ABV) continued to see year-on-year growth, also increasing by 1.2% from FY23. After working with our concession partners to develop and improve the ranges in stores and to help meet the demands of customers in FY23, concession sales saw a growth of 31% in FY24.”
During the period, 27 new stores were opened whilst the end of leases provided an opportunity to close 20 sites in “less profitable” locations.
Post-year end, in February 2025 the group was acquired by Modella Capital and additional third party loan funding of £3m was secured. At the same time the company successfully renewed its existing £12m flexible asset backed loan facility for a further four years, with availability initially capped at £7m.
“In April 2025 the company entered into a Company Voluntary Arrangement (CVA) which was approved by the company’s creditors in May 2025,” the group said. “As a consequence, certain store rent and business rates liabilities were compromised with negotiations commencing with landlords over the future rentals at poorer-performing stores.
“Following the CVA, notice was given to terminate the lease at the company’s head office and distribution centre in Burnley with the intent to move to a third party distribution arrangement.
“Key to the business’s future is an ongoing Store Transformation programme. This aims to enhance the customer experience by focussing on improving and updating the range being offered, modernising store layouts and improving space allocation as well as installing new signage and improving ‘kerb appeal’.
“The initial results of this programme have been highly encouraging and the directors intend to continue the roll-out to stores through FY26. The directors believe these actions will future proof the business and enable the Company to continue as a going concern and to exploit the opportunities in the discount retail sector.”
The company has confirmed a number closures in recent months, which include stores in Milford Haven, Perth, Chester Le Street, Arbroath, Kidwelly, Pershore, Normanton, Peterhead and Shaftesbury, which all closed during June.
Its store in Staveley closed on 12 July, while other locations in Bridlington, Caernarfon and Cupar are expected to shut this month with Kirkham earmarked for closure during August. Four further stores, including Middlewich, Blairgowrie, Ashbourne and Heswall, are also set to close although dates are not confirmed.
