Modella Capital's Retail Strategy Faces Scrutiny as Another Sale Looms
Investment firm Modella Capital, the owner of TG Jones, is reportedly weighing the latest exit from its string of retail acquisitions. According to sources, the private equity firm has been discussing a potential sale of Wynsors World of Shoes, a northern shoe retailer it acquired just three months ago.
A Pattern of Rapid Acquisitions and Exits
Modella Capital has developed a reputation for snapping up retail assets only to sell them or place them into administration shortly afterward. This pattern has raised questions about the firm's long-term strategy in the volatile retail sector.
In January, Modella triggered administration procedures for Claire's Accessories and The Original Factory Shop, putting more than 2,000 jobs at risk. This move came less than a year after the equity firm acquired both retailers. A Modella spokesperson claimed at the time that "administration is the only option," stating neither company had a "realistic possibility" of returning to profitability.
WH Smith Acquisition and Rebranding Challenges
The firm's acquisition of WH Smith's high street arm last year has also faced difficulties. Modella recently called on advisors to consider a drastic restructuring that could put 80 stores on the chopping block. The firm plans to rebrand each of the former WH Smith shops it owns to TG Jones, but stores under this new branding are reportedly performing significantly worse than those still bearing the iconic WH Smith name.
Modella purchased 480 WH Smith stores for £76 million in March last year, in a deal that includes a clause effectively preventing the equity firm from closing struggling shops within a year of the takeover.
Wynsors World of Shoes Could Be Next Exit
Wynsors World of Shoes operates approximately 50 standalone shops in Northern England and employs more than 400 people. According to reports, the shoe retailer had been considering a sale for months prior to its acquisition by Modella.
This potential sale follows Modella's pattern of rapid retail acquisitions followed by quick exits. The firm is also reportedly considering the sale of Hobbycraft, the UK's largest arts and crafts retailer, which it purchased just 18 months ago. Modella recently entered a partnership with toy retailer The Entertainer to supply products in both Hobbycraft and TG Jones stores.
Modella's Background and Financial Position
Despite making a significant impact on the high street in recent years, Modella was only founded in 2022. The firm was originally established as Tailer Debtco before being renamed to Modella in 2023. It is owned by Hay Wain Group, the family office founded by turnaround specialist Jamie Constable.
According to its most recent balance sheet, Modella held £12.8 million in net assets in 2024. The firm's rapid acquisition strategy and subsequent exits have drawn attention from industry observers monitoring the health of Britain's retail sector.
Modella Capital was contacted for comment regarding the potential sale of Wynsors World of Shoes but has not yet responded to inquiries about its retail strategy and future plans for its portfolio of high street brands.
