Major high street discount chain collapses into administration as 137 stores face closure and 1,180 staff at risk

The discount retailer, which sells clothing, homeware and household goods, appointed administrators from Interpath Advisory on Wednesday.

The chain will continue trading across its UK store estate while insolvency specialists assess options to rescue the business.

Administrators said The Original Factory Shop has been hit by difficult trading conditions, pointing to high inflation, weak consumer confidence and rising labour costs linked to Government policy.

The company filed a notice of intention to appoint administrators earlier this month, alongside fashion accessories retailer Claire’s.

Both businesses had already undergone restructuring before being acquired by investment firm Modella Capital last year.

Modella Capital took over the struggling chain while it was already facing serious financial difficulties, but the takeover has failed to reverse its fortunes.

Modella also filed its own notice of intention to appoint administrators and has held talks with potential buyers, although industry observers remain doubtful that a purchaser for a significant part of the business will emerge.

Rick Harrison, managing director at Interpath and joint administrator, 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 such that the company had to be placed into administration.

"Over the coming weeks, we will be working closely with TOFS dedicated team of employees as we endeavour to operate all stores as a going concern while we assess options for the business."

The Original Factory Shop first opened in the late 1960s and has been a familiar presence on British high streets for more than five decades.

If the insolvency proceeds as expected, it would mark the second major retail collapse in just days.

Claire’s appointed Kroll to oversee the administration of its UK and Irish operations on Monday, placing around 1,300 jobs at risk.

Modella acquired Claire’s in September 2025, just six weeks after the retailer’s previous administration.

Together, the two collapses put around 2,500 jobs and 294 stores at risk, increasing scrutiny on the investment firm’s handling of both chains.

The hope now is that the insolvency process will provide breathing room to identify new buyers for both businesses.

Owen Morgan, Managing Director at HR and outplacement specialist INTOO UK & Ireland, described the situation as "a sad day" for the high street.

"The nightmare combination of low footfall and increased operating costs is affecting many brands and it is a time of great instability for decision makers," he said.

Mr Morgan emphasised that with 2,500 jobs at risk, "the ripple effects could be huge for those staff and their families, everybody will be fearing the worst."

He stressed that transparency and fairness must be prioritised, noting that clear communication remains essential for maintaining trust during such difficult periods.