Modella Capital, a relatively unknown investment firm, has found itself at the center of attention as struggling retail chains Claire's and The Original Factory Shop teeter on the brink of collapse. With 2,550 jobs hanging in the balance, the firm's reputation as a ruthless but efficient turnaround expert is being put to the test.
The UK-based company, which was set up by a group of restructuring professionals four years ago, has quickly made a name for itself in the retail world. By targeting medium-sized struggling retailers that few others are willing to take on, Modella Capital has built a portfolio of businesses totaling around 900 shops and employing approximately 10,000 staff.
However, not all of its turnaround efforts have been successful. Hobbycraft, which it acquired just last August, has seen 18 stores closed under its ownership, resulting in the loss of 600 jobs. The Original Factory Shop, meanwhile, has been forced to close 41 stores and relocate to new premises after exiting its Burnley head office and distribution centre.
Despite these setbacks, Modella Capital remains committed to turning around struggling retailers, with a spokesperson stating that it aims to return businesses to growth, preserve jobs, and contribute to local communities. However, critics are questioning the firm's ability to understand the trading of businesses, particularly in today's highly competitive retail environment.
Industry insiders suggest that Claire's was always a challenging business due to high competition from cheap online sellers like Temu and Shein, as well as fast-fashion brands such as Zara and H&M. Modella Capital struggled to secure deals with landlords, leaving the firm with no choice but to pull the plug on its retail stores.
The potential collapse of Claire's and The Original Factory Shop has raised concerns about the future of TG Jones, which was set to benefit from a five-year deal to keep stores open and add Claire's products to their inventory. As Modella Capital steps away from both chains, industry insiders are left wondering what the consequences will be for these struggling retailers and the thousands of employees who depend on them.
Modella Capital's reputation as a turnaround expert has been built on its ability to rapidly implement restructuring measures, including company voluntary arrangements (CVAs) that allow businesses to reduce rents and close underperforming stores. However, not all of its efforts have been successful, leaving questions about the firm's long-term strategy for acquiring and turning around struggling retailers.
One thing is certain: Modella Capital has put itself in a precarious position by taking on high-risk investments in struggling retailers. As the retail landscape continues to evolve, it remains to be seen whether the firm will emerge from this challenging period with its reputation intact or if its reputation as a turnaround expert will come under scrutiny.
The UK-based company, which was set up by a group of restructuring professionals four years ago, has quickly made a name for itself in the retail world. By targeting medium-sized struggling retailers that few others are willing to take on, Modella Capital has built a portfolio of businesses totaling around 900 shops and employing approximately 10,000 staff.
However, not all of its turnaround efforts have been successful. Hobbycraft, which it acquired just last August, has seen 18 stores closed under its ownership, resulting in the loss of 600 jobs. The Original Factory Shop, meanwhile, has been forced to close 41 stores and relocate to new premises after exiting its Burnley head office and distribution centre.
Despite these setbacks, Modella Capital remains committed to turning around struggling retailers, with a spokesperson stating that it aims to return businesses to growth, preserve jobs, and contribute to local communities. However, critics are questioning the firm's ability to understand the trading of businesses, particularly in today's highly competitive retail environment.
Industry insiders suggest that Claire's was always a challenging business due to high competition from cheap online sellers like Temu and Shein, as well as fast-fashion brands such as Zara and H&M. Modella Capital struggled to secure deals with landlords, leaving the firm with no choice but to pull the plug on its retail stores.
The potential collapse of Claire's and The Original Factory Shop has raised concerns about the future of TG Jones, which was set to benefit from a five-year deal to keep stores open and add Claire's products to their inventory. As Modella Capital steps away from both chains, industry insiders are left wondering what the consequences will be for these struggling retailers and the thousands of employees who depend on them.
Modella Capital's reputation as a turnaround expert has been built on its ability to rapidly implement restructuring measures, including company voluntary arrangements (CVAs) that allow businesses to reduce rents and close underperforming stores. However, not all of its efforts have been successful, leaving questions about the firm's long-term strategy for acquiring and turning around struggling retailers.
One thing is certain: Modella Capital has put itself in a precarious position by taking on high-risk investments in struggling retailers. As the retail landscape continues to evolve, it remains to be seen whether the firm will emerge from this challenging period with its reputation intact or if its reputation as a turnaround expert will come under scrutiny.
. They think they can just swoop in, save the business, and walk away with all the credit... but really they're just handing out CVAs left and right 
. And now Claire's and The Original Factory Shop are paying the price! 10k jobs on the line? Talk about a messy divorce 
. Guess you could say Modella Capital is in retail therapy... and not the good kind 
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I feel so bad for those 2,550 employees who are really worried about their jobs right now... Claire's and The Original Factory Shop are like family businesses to some people, and the thought of losing their jobs is just devastating 
. It's not just about the companies themselves, but also the communities they serve. I hope Modella Capital can turn things around for them, but it's hard not to wonder if they'll be able to recover from this 
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. They're trying to cut costs and turn around struggling retailers, but it looks like they're not considering the bigger picture 
. Claire's was already in a tough spot due to online competition, so why did Modella Capital struggle to secure deals with landlords? Shouldn't they be working on finding solutions instead of just pulling the plug? 
. It's like they're playing a game of retail roulette, and it's not looking good 
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. It's not just about closing underperforming stores and reducing rents – it's about creating sustainable business models that drive growth and profitability.
. Will Modella Capital emerge from this period with its reputation intact, or will their strategy come under scrutiny? Only time will tell 
.
. It's sad to think that companies are struggling so much that they can't even keep their own stores open 
. I mean, Modella Capital is trying to help them out, but it's not like they're the only ones who could've done something better 
And now Claire's and The Original Factory Shop are on the brink of collapse? It's a nightmare situation 
. Can't we do better than this?
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. The retail landscape is so competitive now, it's hard to make a profit with those kinds of business models. They're trying to do what's best for their investors, but sometimes that means taking some tough decisions 
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. But on the other hand, they're also causing some major problems for employees and landlords 
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. It's like Modella Capital just threw its hands up in the air and said "oh well" when they couldn't secure deals with landlords 
. I hope they figure out what went wrong and make some changes for next time 
. Fingers crossed Modella Capital can get its act together and start turning things around again 
. I mean, 900 shops and 10k staff sounds like a lot, but when you think about it, those are just numbers, right? It's the people behind them who actually matter 
. And now, with Claire's on the brink of collapse, it's like, what does this say about our expectations as consumers? Are we just looking for cheap stuff online that we don't even care about anymore? 
... and what about the workers? 600 jobs lost because of a failed turnaround effort... it's like, how do you put a price on that?