Flying Tiger Copenhagen, the Danish discount retailer known for its affordable homewares and craft kits, has been acquired by Modella Capital, a UK-based private equity firm. The deal, which covers Flying Tiger's global operations including about 80 stores and over 1,000 employees in the UK, marks Modella's first international acquisition.
Modella's Track Record Raises Concerns
Modella Capital, established four years ago, has quickly gained a reputation for aggressive restructuring. The firm currently owns TG Jones, formerly the high street arm of WH Smith, and is seeking creditor approval for a plan that could close up to 150 stores, including up to 60 housing Post Offices, with hundreds of job losses. Earlier this year, two other Modella-owned retailers, Claire's and The Original Factory Shop, collapsed, resulting in approximately 2,500 job losses. Hobbycraft, acquired by Modella in 2024, has closed at least nine stores through a company voluntary arrangement (CVA).
Flying Tiger's Financial Position
Despite a 22% rise in UK sales to £70.1 million in 2024 and pre-tax profits of £2.6 million, Flying Tiger carried debts exceeding £35 million. The discount retail sector faces mounting pressure from inflation, higher business rates, labour and energy costs, and reduced consumer spending on non-essentials. Competition from rivals like B&M, Home Bargains, Savers, Miniso, and The Entertainer intensifies the challenge. Poundland closed 149 stores earlier this year, Wilko collapsed in 2023, and Dutch rival Hema exited the UK in 2021.
Management and Expansion Plans
Modella has expressed support for Flying Tiger's existing management and their growth strategy, which includes opening over 700 new franchise stores globally by 2030. Joseph Price, Modella's managing director, stated: "With its strong retail brand and unique product offering that has built a loyal customer base across more than 40 countries, Flying Tiger Copenhagen is a business with tremendous potential. We are pleased to be investing in its future." John Dueholm, chair of Flying Tiger, added: "We believe Modella Capital is very well placed as the new majority shareholder to support the company's continued development."
Historical Context
Flying Tiger, originally named Tiger, rebranded as Flying Tiger Copenhagen in 2016. Its first UK store opened in Basingstoke, Hampshire, in 2005, but the brand's origins trace back to the 1980s when founders Lennart and Suz Lajboschitz sold umbrellas at a Copenhagen market. The chain expanded rapidly, opening one or two stores weekly worldwide a decade ago, including in the US. Last year's management buyout was backed by Nordea and Danske Bank.
