Modella Capital: The private equity firm fast becoming the UK high street’s most prolific investor

The private equity firm has agreed to take on 156 stores of the brand’s UK and Ireland business in a rescue deal that preserves around 1,000 jobs.

The move came after Claire’s collapsed into administration in August after it failed to attract a buyer, with prospective bidders deterred by the chain’s steep losses and a looming £355m loan due in December.

The acquisition marks a slight step change for Modella, which has focused primarily on the general merchandise category up until now. Retail Week takes a closer look at Modella’s latest acquisition, Modella Capital’s MO with some of the other UK brands it has acquired over the last few years and how Claire’s fits into its wider strategy?

Who is Modella Capital?

Modella Capital has spent the past year building up its retail portfolio at speed, first acquiring Hobbycraft in August 2024, The Original Factory Shop in February 2025 and WHSmith’s high street business a month later, which now trades as TGJones.

The fund first emerged on the UK retail scene last summer when it placed a bid to acquire The Body Shop, although it eventually lost out on acquiring that business to a consortium led by the British cosmetics tycoon Mike Jatania.

Modella, which up until last year was relatively unknown, is linked to private equity house R Capital and chaired by Steve Curtis, an industry veteran who is connected to the turnaround efforts and subsequent sales of Ted Baker, Jigsaw and Paperchase.

According to its website, the boutique firm says its “investments are focussed on retail and FMCG businesses with a turnover of £10m to £1bn across the UK and Western Europe”.

Modella has kept a relatively low public profile, despite its M&A activity surging over the last year or so, and its strategy so far has involved swooping in on retailers in distress.

Its latest acquisition of Claire’s is no different and marks the boutique’s second fashion deal, having snapped up Ted Baker’s UK licensing partner No Ordinary Designer Label in November 2023, before it collapsed a year later.

What’s next for Claire’s?

Claire’s has been a staple of the British high street since 1996, and a rite of passage for many, known for its best friend bracelets, funky accessoriers and piercings. In recent years, the brand has lost relevance with its core teenage demographic, who have turned towards the likes of Primark or Shein for their accessories.

The UK business has racked up losses totalling £25m over the last three years. According to its most recent accounts filed on Companies House, pre-tax losses narrowed from £5.02m to £4.08m last year as sales remained flat-ish at £137m.

Modella has said very little about its plans for Claire’s, other than that the issues facing the business are “significant”. However, it has stated that a restructure of the retailer’s store estate is on the cards.

The firm said it will enter “a period of accelerated negotiations with landlords” as it looks to determine which of the 156 stores it acquired will be able to stay open.

“It is not possible for Modella to define which of these stores will remain open, and which will sadly have to close, before landlord negotiations are complete,” the firm noted.

It follows a similar pattern as to what Modella has done with its existing portfolio, with the company launching CVAs at both Hobbycraft and The Original Factory Shop to shut down unprofitable stores quickly and cut costs.

The only exception to the pattern has been WHSmith’s high street business – now trading as TGJones – as the firm has agreed to not to implement a mass store closure programme within its first year of owning the business.

As part of the deal to acquire TGJones, Modella are unable to do any major restructuring of the business for at least 12 months. Property insiders say the firm has been letting old WHSmith leases expire, and doing nothing to stop other landlords from exercising break clauses.

One property source says he’s “absolutely convinced” that Modella will at either a CVA or another restructuring tool to reduce TGJones’ inherited store estate when it is able to next year.

For its part Modella’s managing director Joe Price says that he hopes to work with all interested parties in Claire’s to ensure that the firm’s proposed rescue plan will succeed, adding: “As a firm, we strongly believe that this much-loved brand deserves the chance to remain on the High Street in the UK and Ireland”.

It’s hard to understand what Modella, which has primarily focused on the general merchandise category in retail, would want with a fashion accessories chain. Even more so, with one that has struggled in recent years against growing competition and economic headwinds.

One retail insider raises questions over the longevity of Claire’s on the high street and besides from cost-cutting, wonders what Modella can really provide the brand that its previous owner couldn’t.

Retail analyst Nick Bubb notes: “Modella may have some plans for synergies with Hobbycraft and TG Jones e.g. shop-in-shops, but Claire’s doesn’t look to me like a licence to print money.”