The Original Factory Shop homeware chain has called in administrators, putting 1,200 jobs at risk, putting the decision partly down to higher costs from government policies.
Administrators from Interpath have been appointed at the 137-store discount retailer, which was bought by the private equity firm Modella Capital less than a year ago.
On Wednesday, the video game chain Game Retail filed a notice of intention to appoint administrators, while the fashion chain LK Bennett was bought out of administration by a restructuring specialist.
Administrators said the Original Factory Shop would continue to trade on high streets while they “assess options for the business”. Its website ceased taking new orders on Wednesday but orders placed before 28 January would be delivered as usual.
Modella said: “This has been a very tough decision. We have worked intensively in an effort to save the business, but it is now clear The Original Factory Shop doesn’t have a realistic possibility of trading profitably again … The legacy effects of trading prior to our ownership left them highly vulnerable.
“A combination of very weak consumer confidence, highly adverse government fiscal policies and continued cost-inflation is causing many established and much-loved businesses to suffer badly.”
Earlier this month, Modella said administration was the “only option” for The Original Factory Shop and Claire’s, the accessories chain which it also owns.
Interpath said the company had experienced “challenging trading conditions driven by high-cost inflation, fragile consumer confidence and government policies which have led to significant increases in employment costs”.
It said these issues were exacerbated by problems with its third-party warehouse and distribution partner.
Rick Harrison, the joint administrator at Interpath, said: “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.”
Modella said earlier this month that the climate on UK high streets was “extremely challenging” and data suggested “an alarming drop-off in pre-Christmas footfall”. Retailers faced difficult festive trading conditions as shoppers spent less on home furnishings as the cost of essentials such as food and energy bills continued to rise.
Game Retail, which is part of the Sports Direct founder Mike Ashley’s Frasers Group, said it intended to appoint administrators. The legal measure protects Game from creditors.
The chain employed more than 1,900 people according to its most recent accounts, and has more than 200 standalone stores listed on its website as well as outlets in Sports Direct and House of Fraser.
Game fell £2.5m into the red in the year to April 2024 as sales fell to £222.6m from £287.2m a year before, according to accounts filed at Companies House. Frasers did not respond to requests for comment.
The LK Bennett brand, founded by Linda Bennett in London in 1990, has been bought by restructuring specialist Gordon Brothers, which already owns Laura Ashley and Poundland. The deal does not include stores.
Claire’s, the low-price jewellery and ear-piercing chain, appointed administrators from Kroll on Tuesday, putting 1,350 jobs at risk. The retailer has 154 stores.
Modella, which also owns the Hobbycraft chain, last year acquired WH Smith’s high street arm, which it has renamed with a fictitious “family” brand name, TG Jones. It has previously backed the fashion brand Ted Baker’s ill-fated UK licensee.
The administration of The Original Factory Shop comes only six months after a restructuring in which its head office and distribution centre shifted from Burnley to Bolton and it agreed rent cuts on a number of stores.
The chain – which sells everything from electric blankets to trainers – made a £5.6m pre-tax loss in the year to 31 March 2024 as sales fell by 1% to £117.5m despite high inflation in 2023 and into 2024.
Modella acquired The Original Factory Shop from the private equity group Duke Street Capital in February 2025.
The chain was founded by the Black family in Keighley, West Yorkshire, in 1969, opening the first store in a retail network built up by Peter Black. The family sold the chain in 1988, and expansion continued in the decades after, including the 2009 acquisition of 35 Woolworths stores after the chain collapsed, leaving big gaps on Britain’s high streets.
