Two of Britain's well-known high street chains, Claire's and The Original Factory Shop (TOFS), are teetering on the edge of administration, putting approximately 2,500 jobs in jeopardy. This grim development casts a shadow over the retail sector at the start of 2026.
Emergency Filings Follow Festive Trading Period
Sky News has learned that both retailers are understood to be preparing to file notices of intention to appoint administrators. This critical step is expected imminently, coming just days after the crucial Christmas trading period concluded. The filings will provide Claire's and TOFS with temporary protection from their creditors, a move that underscores the ongoing fragility of the UK's retail landscape.
Both chains are owned by the investment firm Modella Capital, which acquired them in separate deals last year. Modella took over TOFS when it was already near collapse and purchased Claire's after it had entered administration. Together, the businesses operate from just over 300 stores across the country.
Multiple Pressures Force Retail Restructuring
Sources indicate that a toxic combination of factors has made the current business models unsustainable. A significantly increased tax burden on the retail industry from government policy, coupled with aggressive demands from landlords to reclaim store spaces, has crippled both chains.
Specific operational challenges have also contributed. For The Original Factory Shop, a problematic shift to a new third-party logistics provider after last year's deal created severe disruptions. Claire's suffered a major blow when its largest concession partner terminated their agreement following Modella's takeover.
The insolvency firms Interpath Advisory and Kroll are expected to handle the administrations of TOFS and Claire's respectively. The intention is reportedly for administrators to continue trading both businesses while seeking potential buyers.
A Bleak Outlook for the UK High Street
This potential collapse arrives amid a deeply challenging environment for retailers. Data from Sensormatic Solutions showed that retail footfall on 23 December, the last full shopping day before Christmas, fell by 13.1% year-on-year. Alongside soaring payroll costs, which hit smaller and medium-sized chains hardest, many analysts predict further distress across the sector in 2026.
The situation echoes recent struggles in the industry. In 2025, major names like Poundland and River Island were forced into restructuring deals to avoid collapse. Claire's itself has been hit hard by shifting consumer habits among its core teenage demographic, having already closed many of its nearly 300 UK stores in earlier restructuring efforts prior to Modella's purchase.
Modella Capital, which also owns the rebranded WH Smith high street estate (TG Jones) and Hobbycraft, declined to comment when contacted by Sky News on Monday afternoon.
