TL:DR – Original Factory Shop faces potential closure of all 137 outlets | UK News
- The Original Factory Shop has entered administration, risking 137 stores and 1,180 jobs.
- Modella Capital, its owner, may appoint administrators imminently.
- The retailer has faced ongoing financial struggles and was on the verge of collapse before Modella’s acquisition last year.
- Modella also reported the collapse of Claire’s on the same day.
High street discount chain Original Factory shop could close all 137 stores | News UK
The Original Factory Shop may vanish from the UK high street for good.
The discount retailer announced today that it has entered administration, putting 137 stores and 1,180 staff at risk.
Modella Capital, which owns The Original Factory Shop, may phone in administrators as soon as this afternoon, according to Sky News.
The business was already on the brink of collapse when Modella bought it last year. Modella had already stripped the company of its assets, similar to Claire’s.
Modella also announced on Monday that Claire’s had gone bust.
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Who is Modella Capital?
Investment firm that also bought WH Smith’s high street business has reputation for rapid and hard-nosed restructuring and stripping assets.
Modella takes out secured loans against a companies assets and then guarantees itself payment. Thus, is becomes one of the lead secured lenders in line to benefit from the any administrator’s sale.
This is what Modella did with Claire’s UK; Used it’s assets as security against a loan understood to be worth about £7.5m against the retail chain’s assets such as stores and stock, while some suppliers are likely to lose out.
Modella is part of the Hay Wain group controlled by the former Touche Ross and RJP accountant and turnaround expert Jamie Constable, who co-founded the investment firm Rcapital in 2004. Hay Wain group is loan shark in overpriced suit, based on Bond street.