It’s something of an unwelcome tradition that the New Year usually brings with it news of weakened retailers being on the verge of collapse. And it hasn’t taken too many days for 2026’s potential casualties to become known.
Claire’s
On Monday evening, Sky News reported that discounter The Original Factory Shop (TOFS) and Claire’s UK and Ireland were at risk, the report coming only a few months after Claire’s was rescued. Within hours, the BBC had reported that the chains would definitely go into administration
The news also comes the week after LK Bennett was said to be on the brink as well and hunting a last-minute buyer to rescue it.
The two retailers at the centre of Monday’s stories are both major names in the UK and between them employ around 2,500 people.
Sky said the two chains “are understood to be filing notices of intention to appoint administrators” to gain temporary protection from creditors. The BBC said the intention had been confirmed by their owner.
With around 300 stores between them, the struggling businesses are both owned by investment firm Modella Capital and had both already been through major restructurings last year.
Modella acquired TOFS in the spring and the Claire’s UK and Ireland business only in September.
So why are they still struggling? The news reports blamed tax increases and “demands from landlords to take back swathes of Claires’ and TOFS’ shops”, as well as very poor Christmas trading for the latest development with the external pressures having “rendered the future of both chains in their current forms unviable”.
Sky added that Interpath Advisory, which ran TOFS’ CVA last year, is expected to handle the chain’s administration with Kroll doing the same for Claire’s.
It’s believed that the administrators will continue operating the two businesses while buyers are sought.
Modella had carved out a niche as one of the key buyers of distressed businesses in the UK and also owns Hobbycraft and WH Smith’s high street business (now renamed TG Jones).
But it may have bitten off more than it could chew with the TOFS and Claire’s purchases as these businesses both had very specific issues that created extra complications. Sky said for TOFS, a “shift to a new third-party logistics provider is thought to have contributed to its challenges following last year’s deal”.
Meanwhile the largest concession partner of Claire’s had decided to end its link after Modella took over.
