The future of two well-known British high street chains hangs in the balance, threatening more than 2,500 jobs. Claire's, the accessories and ear-piercing retailer, and The Original Factory Shop, a discount homewares chain, are both on the verge of administration.
Owner Modella Cites 'Extremely Challenging' Climate
Both businesses are owned by the private equity firm Modella Capital, which also recently acquired the high street arm of WH Smith. In a statement released on Monday, Modella described the UK retail environment as "extremely challenging," pointing to data that shows an "alarming drop-off in pre-Christmas footfall."
The firm stated that administration was now the "only option" for both Claire's and The Original Factory Shop, confirming it has initiated formal insolvency proceedings. "This has been a very tough decision," Modella said. "We have worked intensively in an effort to save both businesses... but neither has a realistic possibility of trading profitably again."
Details of the Proposed Administrations
The potential collapse puts a total of 2,550 jobs at risk across the UK. For Claire's, the advisory firm Kroll is lined up to handle the proposed administration, which would affect approximately 1,350 jobs across its 154-store portfolio. Modella had bought these stores from administrators just over a year ago, in September 2023.
Meanwhile, The Original Factory Shop, which operates about 140 stores, has filed a notice with the high court to appoint administrators from the firm Interpath. This move grants the company 10 days of protection from creditors while its future is negotiated. Around 1,200 jobs are under threat here. Modella had purchased the chain less than a year ago from Duke Street Capital.
Broader Retail Sector Under Pressure
This news follows the recent troubles of other retailers, including the small upmarket fashion chain LK Bennett, which also filed for administration. Modella blamed a "combination of very weak consumer confidence, highly adverse government fiscal policies and continued cost inflation" for the dire situation.
The Original Factory Shop had already undergone a restructure six months ago, moving its head office and shifting its distribution centre. Despite this, the company reported a £5.6m pre-tax loss for the year to 31 March 2024, with sales dipping 1% to £117.5m.
The wider sector is grappling with squeezed household budgets, higher operational costs, and unseasonably warm weather affecting fashion sales. As major players like Next and Marks & Spencer prepare to report their Christmas trading, the stark contrast between the resilient and the vulnerable on the British high street is set to become even clearer.
