The owner of Claire’s and The Original Factory Shop is set to place both retailers into administration, putting more than 2,000 jobs at risk.
Private equity firm Modella Capital said the two retail chains would enter insolvency proceedings across the UK and Ireland to give them breathing space to find a new buyer.
Both retail chains have filed a notice to appoint administrators with Interpath being lined up for The Original Factory Shop and Kroll to handle Claire’s.
Modella said “alarming” low Christmas trading and ongoing tough trading conditions left both retailers in a “vulnerable” position.
The firm acquired Claire’s and 156 of its stores out of administration in September in a deal that preserved around 1,000 jobs.
The Original Factory Shop, which was snapped up early last year, has 140 stores and 1,220 employees.
Modella said: “This has been a very tough decision. 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.”
The firm noted that the retailers were “highly vulnerable” even before it bought them and blamed challenges including the climate, which it said “remains extremely challenging”, and government policy.
“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.”
Interpath declined to comment.
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