The Original Factory Shop (TOFS), the independent discount retail chain, is close to being sold after more than 17 years under the ownership of private equity firm Duke Street.

Sky News has learnt that Baaj Capital, a family office which counts In The Style and party supplies group Amscan International among its investments, has emerged as the frontrunner to buy TOFS.

Retail industry insiders said a deal had yet to be reached but could be struck in the coming days and announced as soon as next week.

Money latest: Experts reveal the best wines for under a tenner

Rival suitors for the business are said to have included Mike Ashley's Frasers Group and Poundstretcher, which is owned by the investment group Fortress.

The terms of Baaj's prospective purchase were unclear on Friday.

Established in 1969, TOFS trades from more than 180 stores across Britain.

It sells beauty brands such as L'Oreal, the sportswear brand Adidas and DIY tools made by Black & Decker.

Read more from Sky News:
Biggest mortgage lender sees three rate cuts
Economy 'faces years of budget pain'
'Unprecedented' leap in business distress

The chain was bought by Duke Street in 2007, with the exiting shareholder having supported the company through the COVID-19 pandemic with an injection of more than £10m.

TOFS is now understood to have no remaining bank debt.

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

(c) Sky News 2025: The Original Factory Shop close to Baaj Capital sale