Major high street discount chain on the brink of collapse with 130 stores at risk of closure

The Original Factory Shop is set to enter administration this week, placing around 1,200 positions in jeopardy across its network of roughly 130 outlets.

The chain was already teetering on the edge of failure when Modella Capital acquired it last year.

According to Sky News, the discount retailer is anticipated to appoint Interpath as its insolvency practitioner, potentially as early as Wednesday afternoon.

Sources indicate that Interpath plans to keep stores trading throughout the administration process.

Modella filed a notice of intention to appoint administrators earlier this month and has since been in discussions with potential buyers, though industry observers remain doubtful that a purchaser for any significant portion of the business will emerge.

TOFS first opened its doors in the late 1960s, establishing itself as a fixture on British high streets over more than five decades.

Several factors combined to undermine the discount chain's financial stability in recent times.

Government policy changes placed additional pressure on the business, while landlords sought to reclaim many of the retailer's more desirable locations.

A botched transition to a new logistics provider further damaged the company's performance.

Modella Capital took over the struggling chain last year when it was already facing severe difficulties, though the acquisition has failed to reverse its fortunes.

Should the insolvency proceed as expected, TOFS would mark the second major retail collapse in just days.

Claire's, the accessories chain also under Modella's ownership, appointed Kroll to oversee administration of its UK and Irish operations on Monday, with approximately 1,300 jobs hanging in the balance.

Together, the twin failures put some 2,500 workers and 294 stores at risk, intensifying scrutiny on those responsible for the affected employees.

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

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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.