Collapsed high street chain’s debts revealed as it closes store in UK | UK | News
A well-known UK discount chain went into administration earlier this year and its debts have now been revealed. The Original Factory Store ran into difficulties and began closing stores. The Factory Shop Ltd, trading as The Original Factory Shop, was founded in 1969 and operates a UK-wide chain of discount stores.
The retail brand went into administration in January after owners Modella Capital said “last resort” measures to save the high street store had not worked. The brand had a store in Lancaster Leisure Park, which is now closed. It also has a store in Garstang, which will close on March 29.
Amid fears for its future, a restructuring took place, with investment firm Modella Capital stepping in to save it.
But in January this year the group said it would have to initiate insolvency proceedings for the business.
Insider reports that details about the bankruptcy are now emerging.
The Original Factory Shop owed more than £30 million to unsecured trade and expense creditors, according to an estimate in a new report by administrators Interpath.
The company had 137 stores across the UK when administrators were appointed in January.
The store sold a wide range of branded and self-sourced products at discounted prices, including clothing, homewares, beauty products, toys and seasonal items.
According to figures provided by the company’s directors, the total unsecured creditor balance at the date of appointment stood at £114 million.
This figure includes debts of approximately £31 million to trade and expense creditors, including £12.6 million owed to trade creditors, £10.7 million to the landlord and £79 million to associated companies.
Interpath’s Richard Harrison and James Clark were appointed joint administrators of The Factory Shop Ltd, which operates as The Original Factory Shop, on January 28, the Lancashire Post reports.
A spokesperson for The Original Factory Shop Garstang said on Facebook: “Unfortunately we were provided with details of the closing day today. Sunday 29 March will be our last day.”
“There are still plenty of discounts available in store and please be aware that we do not set prices and cannot make deals that will make things cheaper.
“We will probably be very busy at the tills and get out as soon as we can but please be patient with us and remember we will all lose our jobs when we close so please be kind.”
