The Original Factory Shop, a well-known discount homeware retailer with a significant presence on British high streets, has entered administration, placing approximately 1,200 jobs in jeopardy. This development marks another troubling chapter in the ongoing crisis facing the UK's retail sector, as private equity owners point to an "extremely challenging" economic climate as the primary cause of the collapse.
A Chain in Crisis
Administrators from Interpath have been formally appointed to oversee the 137-store chain, which was acquired by private equity firm Modella Capital less than a year ago. In a statement, the administrators confirmed that the business would continue to trade while they evaluate potential options for its future. However, the company's website has ceased accepting new orders, although existing orders placed before 28 January will be honoured and delivered as scheduled.
Owners Blame Economic Pressures
Modella Capital has attributed the decision to place The Original Factory Shop into administration to a combination of severe economic headwinds. The firm cited persistently weak consumer confidence, adverse government fiscal policies leading to increased employment costs, and ongoing cost-inflation as the key factors that rendered the business unviable. Modella emphasised that these issues were compounded by pre-existing vulnerabilities from the chain's trading history prior to their ownership.
Rick Harrison, a joint administrator at Interpath, echoed these sentiments, noting that while The Original Factory Shop has long been a staple of local high streets across the country, insurmountable trading challenges have ultimately led to this outcome. The administrators also highlighted additional operational difficulties, including problems with a third-party warehouse and distribution partner, which further strained the business.
Broader High Street Struggles
This administration comes amid a particularly difficult period for UK retailers, with data indicating a sharp decline in pre-Christmas footfall and consumers prioritising spending on essentials like food and energy over discretionary items such as home furnishings. The situation is reflective of a wider trend, as Modella Capital recently placed Claire's, the accessories chain it also owns, into administration, putting a further 1,350 jobs at risk.
Recent History and Financial Performance
The Original Factory Shop underwent a significant restructuring just six months prior to this administration, which involved relocating its head office and distribution centre from Burnley to Bolton and negotiating rent reductions on several stores. Despite these efforts, the chain reported a pre-tax loss of £5.6 million for the year ending 31 March 2024, with sales declining by 1% to £117.5 million, even in the face of high inflation throughout 2023 and into 2024.
Founded by the Black family in Keighley, West Yorkshire in 1969, The Original Factory Shop expanded over the decades, including acquiring 35 former Woolworths stores after that chain's collapse in 2009. Modella Capital purchased the business from private equity group Duke Street Capital in February 2025, but the turnaround proved unsuccessful in the current economic environment.
This administration underscores the profound pressures facing traditional brick-and-mortar retailers, as they grapple with shifting consumer habits, rising operational costs, and broader economic uncertainty. The fate of The Original Factory Shop serves as a stark reminder of the fragility of the UK high street in today's challenging market conditions.
