Modella Capital, a firm set up by a group of restructuring professionals four years ago, has found itself at the center of a storm surrounding two struggling retailers, Claire's and The Original Factory Shop. The UK-based investment firm has acquired these businesses within the last year, and now faces the very real prospect of collapse.
With 2,550 jobs hanging in the balance, Modella Capital is under intense scrutiny for its handling of Claire's and The Original Factory Shop. It is alleged that the firm took on significant financial risks with these deals, which included a £7.5m loan to Claire's UK assets as security against repayment. This move has sparked concerns about the firm's ability to recover any losses.
The collapse of Claire's and The Original Factory Shop comes amidst a challenging retail landscape, where consumers are increasingly turning away from high street brands in favor of online rivals such as Temu and Shein. Furthermore, the industry is grappling with the ongoing impacts of government fiscal policies and rising cost inflation.
Modella Capital has gained a reputation for rapid restructuring, putting both Hobbycraft and The Original Factory Shop through company voluntary arrangements to slash rents and close stores. However, some experts have raised questions about the firm's approach, highlighting that it lacks experienced traders who can navigate complex business situations.
The group behind Modella Capital is part of the Hay Wain group, controlled by Jamie Constable, a former turnaround expert with extensive experience in restructuring retailers such as WH Smith and Boots. The company has secured funding from specialist lenders including Secure Trust Bank and Aurelius, which has provided significant backing to its deals.
Modella's exit from Claire's marks a significant turning point for the firm, which had promised to keep stores open and expand its reach through hundreds of TG Jones outlets under a five-year deal. However, with the collapse of The Original Factory Shop looming, there are growing concerns about the future prospects of TG Jones, which is currently bound by an agreement that blocks Modella from restructuring the business until next summer.
As the stakes continue to rise, experts warn that Modella Capital must now demonstrate its ability to adapt and respond to changing market conditions in order to avoid further setbacks.
With 2,550 jobs hanging in the balance, Modella Capital is under intense scrutiny for its handling of Claire's and The Original Factory Shop. It is alleged that the firm took on significant financial risks with these deals, which included a £7.5m loan to Claire's UK assets as security against repayment. This move has sparked concerns about the firm's ability to recover any losses.
The collapse of Claire's and The Original Factory Shop comes amidst a challenging retail landscape, where consumers are increasingly turning away from high street brands in favor of online rivals such as Temu and Shein. Furthermore, the industry is grappling with the ongoing impacts of government fiscal policies and rising cost inflation.
Modella Capital has gained a reputation for rapid restructuring, putting both Hobbycraft and The Original Factory Shop through company voluntary arrangements to slash rents and close stores. However, some experts have raised questions about the firm's approach, highlighting that it lacks experienced traders who can navigate complex business situations.
The group behind Modella Capital is part of the Hay Wain group, controlled by Jamie Constable, a former turnaround expert with extensive experience in restructuring retailers such as WH Smith and Boots. The company has secured funding from specialist lenders including Secure Trust Bank and Aurelius, which has provided significant backing to its deals.
Modella's exit from Claire's marks a significant turning point for the firm, which had promised to keep stores open and expand its reach through hundreds of TG Jones outlets under a five-year deal. However, with the collapse of The Original Factory Shop looming, there are growing concerns about the future prospects of TG Jones, which is currently bound by an agreement that blocks Modella from restructuring the business until next summer.
As the stakes continue to rise, experts warn that Modella Capital must now demonstrate its ability to adapt and respond to changing market conditions in order to avoid further setbacks.
They're trying to play it cool with their restructuring tricks, but at the end of the day they're just fiddling with fire 
If Claire's and The Original Factory Shop go belly up, who's gonna clean up the mess? 
It's not like Jamie Constable's expertise will magically solve all their problems 
He was good in his old job, but restructuring retailers is a whole different ball game...
this whole thing feels like a big mess, modella capital took on way too much risk with claire's and theo's 
2,550 jobs are at stake, that's not something you can just 'restructure' away... 
... gotta keep an eye on how they handle this situation!
. The UK retail landscape has been so different for years now, with online shopping becoming a major player. I think we need to give support to retailers like Modella Capital who are trying to adapt, but at the same time, we should also consider new approaches, like incorporating more online elements into their businesses. The lack of experienced traders on board is a big concern 
. If they can't handle Claire's and The Original Factory Shop, how will they deal with TG Jones? I'm not saying Modella Capital is at fault, but surely there are lessons to be learned from this. We need to find a balance between supporting struggling retailers and encouraging innovative solutions 
. i mean, we all know the retail landscape is struggling and consumers are flocking to online rivals like temu and shein... but still, modella capital thinks it can just waltz in and turn these businesses around? please 
. They need to be super careful how they manage those £7.5m loans, can't afford any losses 
. Don't want to see 2,550 jobs go down the drain 
. Need Modella to step up their game and show they can adapt in this crazy retail landscape 
.
... i mean, they did do a good job restructuring hobbycraft and original factory shop tho 
. but 2,550 jobs are at stake here, that's really serious stuff