High street retailers Claire’s and The Original Factory Shop are set to enter administration, placing around 2,500 jobs at risk across the UK and Ireland, as their owner cited weak trading conditions and poor Christmas sales.
Modella Capital, which owns both chains, said the retailers would enter insolvency proceedings to allow time to seek new buyers. The firm said the move would provide temporary breathing space but acknowledged that both businesses are in a vulnerable position.
Claire’s operates 154 stores and employs about 1,355 staff, while The Original Factory Shop has 140 outlets and around 1,220 employees.
Turbulence At Claire’s
Claire’s, which is popular with younger shoppers for its brightly coloured accessories, has faced sustained difficulties in recent years. Its US parent company filed for bankruptcy last year, prompting efforts to find a buyer for the business.
Modella acquired Claire’s in September, around six weeks after the retailer had already entered administration. That earlier collapse led to the loss of roughly 1,000 jobs and the closure of 145 stores.
Owner Cites Weak Trading Conditions
Modella Capital said it had made repeated attempts to stabilise both retailers but concluded that neither had a realistic path back to profitability. The firm said trading conditions on the high street remain extremely challenging and described Christmas sales as alarmingly low.
It said both businesses were already highly vulnerable before being acquired and pointed to a combination of weak consumer confidence, rising costs, and government policy as factors weighing on performance.
The firm added that many established retailers are struggling as shoppers continue to move online, while the costs of running physical stores remain high.
Broader Pressure On High Street Retail
The decision comes amid a difficult period for UK retailers, with falling footfall and persistent cost pressures. Modella said continued cost inflation and subdued household spending have made trading conditions increasingly difficult.
The investment firm has expanded its presence on the UK high street in recent years. It bought WH Smith’s high street business last year and acquired arts and crafts retailer Hobbycraft the year before that.
Government Policy Criticism
Modella also criticised recent fiscal measures introduced by Chancellor Rachel Reeves, saying higher operating costs have added to the strain on retailers. Recent Budgets have included tax increases, a rise in the minimum wage, and higher employer National Insurance contributions.
Some business owners have warned of wider fallout. James Fitzgerald, landlord of the Thatched House pub in Hammersmith, said his operating costs have risen by £22,000 over the past year, with higher National Insurance contributions cited as a key factor.
The administrations of Claire’s and The Original Factory Shop add to growing concerns about the future of traditional retailers operating on Britain’s high streets.
Featured image credits: Flickr
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