Baaj Capital, the family office behind fashion retailer In The Style, is frontrunner to acquire The Original Factory Shop (TOFS), which has been owned by private equity firm Duke Street since 2007.

TOFS, one of the UK’s biggest independent discount retailers, is close to being sold, according to Sky News.

Retail industry insiders said a deal had yet to be reached but could be struck in the coming days and announced later this week. The terms of Baaj’s prospective purchase were unclear, the report said

Established in 1969, TOFS trades from more than 180 stores across Britain, selling a variety of goods including fashion and beauty brands (from Adidas to Joules, Abercrombie & Fitch, Burberry, Calvin Klein, Hunter, Regatta, Jimmy Choo, Ariana Grande, L’Oréal and more).

The chain was bought by Duke Street for £68.5 million in 2007 with the backer having supported the company through the pandemic with an injection of more than £10 million.

In early December, TOFS was reportedly “exploring options” after Deloitte earlier failed to find a buyer for it. Earlier, Duke Street had hired new advisers to find such a buyer.

At the time, a TOFS spokesman said the business “continues to trade as normal and is expected to perform well over the busy Christmas period”.

However, its results filed last year for FY23 showed turnover falling from £124.4 million to £118.7 million and while the gross profit margin increased to 50.1% from 48.6% EBITDA was down from £8.5 million to £4.6 million.

Duke Street has so far declined to comment, while Baaj Capital had been contacted for comment.