Original Factory Shop Collapses: All 137 Stores Close Permanently
In a devastating blow to the British retail sector, The Original Factory Shop has permanently closed all 137 stores and its head office after collapsing into administration. The discount department store, which employed 1,180 people when it entered administration in January, has seen the majority of its workforce made redundant as administrators Interpath confirmed the complete shutdown on Thursday.
Administration and Mass Redundancies
Administrators Interpath implemented a phased closure of the entire store portfolio due to the company's dire financial position. A spokesperson stated: "The majority of employees have been made redundant, while a small number of staff have been retained to assist the joint administrators in their duties as they move towards formally winding up the business." A specialist team has been established to support impacted staff with redundancy claims through the Redundancy Payments Service.
Modella Capital Blames Government Policies
Private equity firm Modella Capital, which placed The Original Factory Shop into administration along with Claire's Accessories earlier this year, has pointed to weak consumer confidence and "adverse government fiscal policies" as primary reasons for the collapse. The firm has claimed that government policy is forcing British businesses to "suffer" in the current economic climate.
Broader Retail Struggles for Modella
Modella Capital's retail portfolio appears to be facing significant challenges across multiple brands. The firm recently acquired WH Smith's high street stores, rebranding them as TG Jones, but these locations have reportedly been struggling with low sales. According to The Telegraph, Modella's agreement with WH Smith includes a clause preventing the closure of struggling shops within 12 months of the takeover.
Sales at TG Jones stores have been particularly impacted by poor name recognition of the new brand, with shops retaining the WH Smith storefront reportedly performing better than renovated locations. The private equity firm has called in emergency advisors to lead a drastic restructuring of TG Jones after purchasing the 480 stores from WH Smith for £76 million last year.
Potential Further Asset Sales
Modella Capital is reportedly considering additional asset sales, including potentially offloading Wynsors World of Shoes, a northern shoe retailer acquired just four months ago. This follows a pattern of the private equity firm acquiring high street retailers only to place them into administration shortly afterward - both Claire's Accessories and The Original Factory Shop entered administration less than two years after Modella purchased them.
Company Background and Financial Position
Modella Capital was originally formed as Tailer Debtco in 2022 before being renamed a year later. The firm 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 Original Factory Shop was founded in 1969 and was headquartered in Bolton, offering a diverse range of products including fashion, homeware, toys, and personal care items. The closure marks the end of a 57-year retail presence that once served communities across the United Kingdom with discount department store offerings.
