Duke Street looks to dispose of The Original Factory Shop

Discount retailer The Original Factory Shop has reportedly been placed on the market for up to £200m.

Private equity owner Duke Street has hired KPMG to advise on the disposal of the 134-store chain. It has been predicted that the completion of the sale could take up to a year.

The move comes as several buy-out vehicles prepare to request more cash from investors, and are eager to complete deals or to demonstrate returns in order to set themselves apart from rivals.

The chain has prospered in the economic downturn as consumers look to get more for their cash. The retailer sells branded products such as L'Oreal and Adidas, and its range includes clothing, toys, electricals, houseware and gifts, all of which are discounted by up to 70 per cent.

The chain was created in 1969 as part of Peter Black's empire and offered excess orders and seconds from Marks & Spencers. It was bought by Duke Street in a management buyout deal worth £69 million.

The Original Factory Shop aims to expand its warehouse facilities to double in size, to cope with an anticipated rise in business. It currently has a workforce of 2,100.

Its accounts showed sales of £132 million for the year to March 28, which is an increase of 35 per cent on the previous year.

In a late afternoon update today, a spokesperson for The Original Factory Shop said that although Duke Street was advising the business, the business is not on the market.

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