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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.<\/p>\n
Administrators from Interpath have been appointed at the 137-store discount retailer, which was bought by private equity firm Modella Capital<\/a> less than a year ago.<\/p>\n Administrators said the firm would continue to trade on high streets while they \u201cassess options for the business\u201d. Its website ceased taking new orders on Wednesday but orders placed before 28 January would be delivered as usual.<\/p>\n Modella said: \u201cThis has been a very tough decision. We have worked intensively in an effort to save the business, but it is now clear that The Original Factory Shop doesn\u2019t have a realistic possibility of trading profitably again \u2026 The legacy effects of trading prior to our ownership left them highly vulnerable.<\/p>\n \u201cA 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.\u201d<\/p>\n Earlier this month, Modella had said administration was the \u201conly option\u201d<\/a> for The Original Factory Shop and Claire\u2019s, the accessories chain which it also owns.<\/p>\n Interpath said the company had experienced \u201cchallenging trading conditions driven by high cost-inflation, fragile consumer confidence and government policies which have led to significant increases in employment costs\u201d.<\/p>\n It said these issues were exacerbated by problems with its third-party warehouse and distribution partner.<\/p>\n Rick Harrison, joint administrator at Interpath, said: \u201cThe 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.\u201d<\/p>\n Modella said earlier this month that the climate on UK high streets was \u201cextremely challenging\u201d and data suggested \u201can alarming drop-off in pre-Christmas footfall\u201d. 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<\/a>.<\/p>\n <\/gu-island><\/p>\n Claire\u2019s, 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.<\/p>\n Modella, which also owns the Hobbycraft chain, last year acquired WH Smith\u2019s high street arm<\/a>, which it has renamed with a fictitious \u201cfamily\u201d brand name, TG Jones<\/a>. It has previously backed the fashion brand Ted Baker\u2019s ill-fated UK licensee<\/a>.<\/p>\n 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.<\/p>\n The chain \u2013 which sells everything from electric blankets to trainers \u2013 made a \u00a35.6m pre-tax loss in the year to 31 March 2024 as sales slid by 1% to \u00a3117.5m despite high inflation in 2023 and into 2024.<\/p>\n