London, January 5, 2026, 17:53 GMT
- Claire’s and The Original Factory Shop are preparing insolvency filings, Sky News reported.
- About 2,500 jobs across just over 300 stores are at risk, according to the reports.
- Rising costs and weaker demand are squeezing mid-sized UK chains after Christmas trading.
Claire’s and The Original Factory Shop (TOFS) are close to filing notices of intention to appoint administrators, a step that would shield the retailers from creditor action while they pursue a rescue, Sky News reported on Monday. ( source)
The chains employ about 2,500 people and trade from just over 300 stores, the report said. The filings would come just after the Christmas trading period, when UK retailers typically make a large share of annual profit.
The timing matters because it lands at the start of the year, as large retailers prepare to disclose festive sales and landlords push hard on rent and lease terms. It is another test of whether value-led and accessories chains can withstand higher costs and softer demand on the British high street.
It also adds pressure on private equity-backed turnarounds that were struck quickly last year. Both Claire’s and TOFS are owned by Modella Capital, which bought the businesses in separate deals over several months, Sky News reported.
A notice of intention to appoint administrators is a formal UK insolvency step that gives a company short-term breathing space from creditors while directors and advisers assess options. If administrators are appointed, they can keep trading while seeking a buyer, or move to closures if a sale fails.
Interpath Advisory is expected to handle TOFS and Kroll is expected to handle Claire’s, Sky News reported. TheBusinessDesk also reported the companies had sought court protection and said “administration is the only option.” ( source)
Sky News cited a combination of higher tax burdens on retailers and pressure from landlords seeking to take back stores as factors weighing on the chains. Modella declined to comment when contacted by Sky News.
The strains are showing up in shopper traffic. Data from Sensormatic Solutions cited by Sky News showed footfall on December 23, the last full shopping day before Christmas, fell 13.1% from a year earlier.
TOFS has also been hit by operational disruption after switching to a new third-party logistics provider, Sky News reported. Claire’s, which targets teen shoppers and offers ear piercing, has been hurt by shifting customer behaviour and the loss of its largest concession partner, the report said.
In August, Will Wright, UK chief executive at insolvency firm Interpath, said administrators would try to keep stores trading “for as long as we can” while assessing options, including a sale. (source)
The immediate risk is that talks with lenders, landlords and buyers fail to land quickly enough. Even if administrators keep stores open, buyers often demand store closures and rent cuts, leaving staff and suppliers exposed to a drawn-out restructuring.
