A large discount retailer is reportedly preparing to unveil a package of major rent cuts for its store landlords, leading to fears there could be “significant” store closures. Modella Capital, the new owner of The Original Factory Shop, is said to be finalising plans for a company voluntary arrangement at the high-street chain.
Company voluntary arrangements, known as CVAs, are an insolvency process that allow companies to pay off debts over a fixed period of time and continue to trade. The CVA requires court approval but an announcement could be made in the coming days, sources told Sky News. The broadcaster also reports that property sources cited industry rumours that there could be “significant” store closures and job losses.
Modella Company is also said to be looking at a two-year rent-free period at some The Original Factory Shop stores.
Sources speculated that dozens of shops could close under a CVA, Sky News reported.
Renowned for its discount prices, The Original Factory Shop was established by the Black family in Burnley, Lancashire, in 1969 and went to expand across the UK.
The department chain has a reported 187 stores, selling everything from fashion and footwear to home and garden products.
Modella bought the company earlier this year from private equity firm Duke Street Capital, which had owned it since 2007.
At the time of the takeover, it is thought there were 1,800 employees.
The Express has approached Modella for a comment.
It comes as 2025 has marked another hard year for Britain’s high streets.
At least 133 big brand high street stores have closed or are earmarked for closure in 2025 so far.
Huge retailers like WHSmith and Homebase have shed stores after selling off some units and closing others, while even big names like Starbucks, Greggs and Iceland have shut some branches.
A number of fashion retailers have also closed stores.
In February, it was announced The Original Factory Shop in Invergordon was pulling down its shutters for the final time that month.
Locals expressed their disappointment online over the closure.
