High street retailers Claire’s and The Original Factory Shop – which has an outlet in Congleton – are being put into administration, risking 2,500 jobs, the BBC has reported.
The Original Factory Shop – which has been trading in the UK since 1969 – and Claire’s now face closing all 239 stores, including a branch in Congleton.
The move came after a turbulent time for Claire’s, popular with young teens for its brightly coloured and cheap accessories, which was seeking a buyer after its US owner filed for bankruptcy last year.
Modella Capital, which owns both chains, said the retailers would enter insolvency proceedings across the UK and Ireland. It is hoped the administration will give them breathing space to find a new buyer.
Modella told the BBC that tough trading conditions and “alarmingly” low Christmas trading left both in a “vulnerable” position.
Claire’s has 154 stores and 1,355 staff, while The Original Factory Shop has 140 stores and 1,220 staff.
Modella purchased Claire’s in September, six weeks after its previous collapse into administration, in a deal that saw around 1,000 job losses at the retailer, while 145 stores closed.
The investment firm has owned The Original Factory Shop – a discount chain selling a wide range of products including electrical goods, beauty products and homewares – since early last year.
“This has been a very tough decision,” said Modella in a statement.
“We have worked intensively in an effort to save both businesses, having made last-ditch attempts to rescue them, but neither has a realistic possibility of trading profitably again.”
Modella said that the chains were “highly vulnerable” even before it bought them.
It also blamed challenges – including the climate – on the high street, which it said “remains extremely challenging”, as well as Government policy.
The two shops are the latest casualties of a tough trading environment that has seen high street sales fall as shoppers move online, ditching old favourites facing the high cost of maintaining stores.
“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 said.
The investment firm also owns WH Smith’s high street retail division – now branded TG Jones – and arts and crafts retailer Hobbycraft.
Modella was the latest business to criticise measures by chancellor Rachel Reeves which have seen operating costs rise, making trading even more difficult as high inflation squeezes household budgets.
The Original Factory Shop was established in 1969 as part of Peter Black’s retail network. Initially it sold soap manufactured by one of Black’s factories.
The chain sells fashion, homewares, toys and personal care products. The products can be from the chain’s own lines, branded products or cut label products from a high street chain or supermarket.
