High street chains Claire’s and The Original Factory Shop have entered administration, placing around 2,500 UK jobs at risk in a fresh blow to the retail sector.
A spokesperson for their owner, Modella Capital, said insolvency proceedings had been launched for both businesses after efforts to rescue them failed.
"Very sadly, we have had to initiate insolvency proceedings for The Original Factory Shop (TOFS) and Claire’s Accessories UK & Ireland," the spokesperson said.
"This has been a very tough decision. We have worked intensively in an effort to save both businesses, having made last-ditch attempts to rescue them, but neither has a realistic possibility of trading profitably again."
They said administration was now the only option, blaming long-standing problems that pre-dated Modella Capital’s ownership.
"In both cases, the legacy effects of trading prior to our ownership left them highly vulnerable," the spokesperson added.
The firm said conditions on the high street remain "extremely challenging", warning that the two chains are far from alone in facing serious difficulties.
Recent data from Sensormatic and other sources has pointed to a sharp fall in footfall ahead of Christmas, adding further pressure to struggling retailers.
According to Modella Capital, weak consumer confidence, rising costs and what it described as "highly adverse" government fiscal policies have combined to put many established and well-known businesses under severe strain.
Sources said a mix of government policy and rising costs has left both chains struggling to survive
| PA"It’s a simple fact that if retailers can’t make money, they risk having to close – and jobs across the country are lost," the spokesperson said.
The two chains, which together operate just over 300 stores and employ around 2,500 people, are both owned by investment firm Modella Capital.
Modella bought the businesses through separate deals over several months last year, stepping in as TOFS hovered close to collapse and acquiring Claire’s after administrators had already been called in.
Industry sources say a combination of government policy and rising costs has left both retailers struggling to survive. They point to a much heavier tax burden on the retail sector, alongside pressure from landlords seeking to take back large numbers of stores occupied by Claire’s and The Original Factory Shop.
Together, these pressures are understood to have made it impossible for either chain to continue trading in its current form, raising fresh concerns over jobs and the future of the British high street.
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Filing for administration will give both businesses temporary protection from creditors while their finances are assessed, underlining the fragile state of the UK retail sector.
Insolvency specialists expect Interpath Advisory to oversee the administration of TOFS, having previously handled a company voluntary arrangement for the chain. Kroll is expected to manage the Claire’s process.
Sources said administrators are likely to keep both businesses trading for now while potential buyers are sought.
Each chain has also faced its own specific challenges. TOFS ran into difficulties after switching to a new third-party logistics provider following its takeover.
Claire’s, meanwhile, was hit after its largest concession partner ended its agreement shortly after Modella took control.
The wider retail backdrop remains tough.
Rising payroll costs have hit small and medium-sized retailers particularly hard, prompting warnings of further failures in the months ahead.
High streets have been hit by a wave of closures since the pandemic | PAThe struggles facing Claire’s and TOFS follow a difficult 2025 for the sector, during which Poundland and River Island both turned to restructuring deals to avoid collapse.
Claire’s had previously operated close to 300 UK stores but has been affected by changing shopping habits among its core teenage customer base, adding to the pressures now facing the chain.