High street retailers Claire’s and The Original Factory Shop (TOFS) are set to enter administration after their owner, Modella Capital, announced that last-ditch rescue efforts had failed. This decision places approximately 2,500 UK staff at risk of redundancy.
The two retailers, which had previously undergone restructuring, were acquired by investment firm Modella Capital last year. Modella Capital stated it had made the “tough decision” to initiate insolvency proceedings for both businesses due to their inability to trade profitably.
This move affects 1,355 employees across 154 Claire’s shops in the UK and Ireland, and 1,220 staff at 140 TOFS stores. Court records indicate that a notice of intention to appoint an administrator was filed for both chains on Monday afternoon.
A company spokesperson commented, “We have worked intensively to save both businesses, having made last-ditch attempts to rescue them, but neither has a realistic possibility of trading profitably again. In these circumstances, administration is the only option.”
The administrations for the two retailers are expected to be managed by Interpath Advisory in conjunction with risk advisory firm Kroll.
Modella Capital cited challenging retail conditions as a significant factor affecting British businesses. The firm noted, “In both cases, the legacy effects of trading prior to our ownership left them highly vulnerable. The climate on the high street remains extremely challenging, and TOFS and Claire’s are not alone in experiencing difficulties. A combination of very weak consumer confidence, highly adverse government fiscal policies, and continued cost inflation is causing many established and much-loved businesses to suffer badly.”
Modella Capital acquired over 150 Claire’s shops last year, although 145 were excluded from the deal, leading to their closure. The fashion accessories chain had previously appointed administrators for its UK and Ireland operations following a bankruptcy filing in the US. TOFS, a discount department store chain, was sold to Modella in February.
