DISCOUNT retailer The Original Factory Shop has fallen into administration, putting 1,180 jobs at risk nationwide, although its Lydney store is expected to continue trading for the time being.

Administrators from Interpath said the business had been hit by challenging trading conditions, including rising operating costs, a reduction in customer footfall and government policy changes which led to what they described as “significant increases” in staff costs.

The Original Factory Shop, which operates from 67A Newerne Street in Lydney town centre, is one of 137 stores across the UK affected by the move. Interpath confirmed that all physical shops will continue to trade as normal while options for the business are assessed. However, the company’s online store has closed with immediate effect.

The chain was sold less than a year ago to private equity firm Modella Capital, which also owns TG Jones, formerly WH Smith, and Hobbycraft. Founded in 1969, The Original Factory Shop sells a wide range of discounted branded goods, including homewares, furniture, electrical items, clothing and toiletries.

Rick Harrison, managing director at Interpath and joint administrator, said the retailer had long been a familiar presence on high streets across the country but had been unable to withstand the current pressures facing the retail sector.

Interpath added that sales had also been affected by issues involving a third-party warehouse and logistics provider, further disrupting stock availability.

Modella Capital began insolvency proceedings for The Original Factory Shop earlier this month, alongside accessories chain Claire’s, which it also owns and is still seeking to sell.

The announcement comes after a difficult Christmas and New Year period for UK retailers, with sales failing to meet expectations during what is normally a busy trading window. Increased National Insurance contributions and a higher minimum wage have added further pressure, while customers continue to feel the impact of rising living costs.