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High street retailers Claire’s and The Original Factory Shop are facing administration, putting approximately 2,500 jobs at risk. This development comes during a challenging period for Claire’s, a brand well-known among tweens for its vibrant accessories. The company had been looking for a buyer following the bankruptcy filing by its US parent company last year.
Both chains are owned by Modella Capital, which announced that Claire’s and The Original Factory Shop will enter insolvency proceedings throughout the UK and Ireland. This step is intended to provide temporary relief, allowing time to secure a potential buyer. Modella cited difficult trading conditions and “alarming” weak sales during the Christmas period as factors that left the businesses in a vulnerable state.
Claire’s operates 154 stores employing 1,355 people, while The Original Factory Shop runs 140 stores with a staff of 1,220. Modella acquired Claire’s last September, shortly after the retailer had previously gone into administration, an event that led to around 1,000 job losses and the closure of 145 stores. The investment firm has held ownership of The Original Factory Shop since early last year. Reflecting on the decision, Modella described it as “very tough,” acknowledging extensive efforts to save the two businesses but concluding that neither had a realistic chance of returning to profitable trading.
According to Modella, the chains were already “highly vulnerable” prior to their acquisition. The firm highlighted ongoing challenges affecting the high street, including the difficult climate for retailers and government policies. They emphasized that established businesses continue to struggle as consumer confidence remains low, fiscal policies prove unfavorable, and inflation drives costs higher. Modella also noted its increasing presence in the UK retail sector, having purchased WH Smith’s high street stores last year and taken over Hobbycraft, the arts and crafts retailer, the year before.
Modella’s announcement also echoed criticism of recent government actions under Chancellor Rachel Reeves. The firm pointed to rising operational costs spurred by government measures that have further pressured businesses amid persistently high inflation. Notably, recent Budgets have introduced tax increases, raised the minimum wage, and increased employer National Insurance contributions. These changes have raised concerns across various sectors, including hospitality; for example, James Fitzgerald, the landlord of the Thatched House pub in Hammersmith, reported a £22,000 rise in costs over the past year, attributing much of that increase to National Insurance hikes. The Treasury has been approached for comment on the situation
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