The Original Factory Shop Enters Administration, Putting 1,200 UK Jobs at Risk
The crisis on Britain's high streets has deepened significantly with the announcement that The Original Factory Shop has called in administrators, placing approximately 1,200 jobs in jeopardy across its network of 137 stores. This move underscores the severe challenges facing the retail sector, as private equity owners point to an "extremely challenging" economic climate as a primary cause for the collapse.
Administrators Appointed Amidst Trading Difficulties
Administrators from Interpath have been formally appointed to oversee the discount homeware retailer, which was acquired by private equity firm Modella Capital less than a year ago in February 2025. In a statement, the administrators confirmed that the company will continue to trade on high streets while they "assess options for the business." However, the retailer's website has ceased accepting new orders as of Wednesday, though existing orders placed before 28 January will be delivered as usual.
Factors Behind the Collapse
Modella Capital attributed the administration decision to a combination of critical factors:
- Weak consumer confidence, which has led to reduced spending on non-essential items like home furnishings.
- Adverse government fiscal policies, resulting in significant increases in employment costs.
- Persistent cost-inflation, exacerbating operational expenses.
Rick Harrison, a joint administrator at Interpath, noted: "The Original Factory Shop has long been a cornerstone of local high streets up and down the country. Unfortunately, however, trading challenges have impacted the business." These issues were further compounded by problems with the company's third-party warehouse and distribution partner.
Broader Retail Sector Struggles
This administration follows closely on the heels of Claire's, another Modella-owned chain, which appointed administrators from Kroll earlier this week, threatening 1,350 jobs across 154 stores. Modella had previously indicated that administration was the "only option" for both retailers, citing data showing an "alarming drop-off in pre-Christmas footfall" and difficult festive trading conditions as shoppers prioritised essentials like food and energy bills.
Historical Context and Financial Performance
Founded by the Black family in Keighley, West Yorkshire in 1969, The Original Factory Shop expanded over the decades, including the acquisition of 35 Woolworths stores in 2009 after that chain's collapse. Despite a restructuring six months ago that involved moving its head office from Burnley to Bolton and securing rent cuts on several stores, the chain reported a £5.6 million pre-tax loss for the year ending 31 March 2024. Sales declined by 1% to £117.5 million, even amidst high inflation throughout 2023 and into 2024.
Modella Capital, which also owns the Hobbycraft chain and recently acquired WH Smith's high street arm, reiterated the dire state of the UK retail environment, stating that many "established and much-loved businesses" are suffering badly due to these economic pressures.
