Claire’s and The Original Factory Shop ‘on brink of collapse’ with 2,500 jobs in danger

More than 2,000 jobs are at risk as two major chains are on the brink of collapse in a fresh blow to the British high street.

Accessories giant Claire’s and discount favourite The Original Factory Shop (TOFS) are understood to be filing notices of intention to appoint administrators just days after the crucial Christmas trading period.

The two high street staples had both undergone emergency restructurings and were snapped up last year in deals but despite hopes of a turnaround, the cash has run out and both are now close to collapse again, it is reported.

The filings will buy both Claire’s and TOFS temporary breathing space from creditors as it essentially hits the pause button on any debt collectors, Sky News reports.

But it is a hammer blow to the beleaguered British high street and underlines fragile retail environment as the industry’s biggest players prepare to report publicly on their festive sales performance.

The two chains, which between them trade from just over 300 stores and employ about 2,500 people, are both owned by the investment firm Modella Capital.

It snapped up both chains in separate deals over the course of several months last year. TOFS was already on the brink of collapse and Claire’s had called in administrators before the deals

Insiders told Sky News that a combination of higher tax burdens on the retail industry and demands from landlords to take back swathes of Claires’ and TOFS’ shops had rendered the future of both chains in their current forms unviable.

Insolvency experts from Interpath Advisory are expected to handle the process for TOFS, while Kroll is lined up to manage the administration for Claire’s, Sky News reported.

It’s understood the retailer’s will keep their shops open for now while administrators desperately hunt for new buyers to save the brands.

The retail industry faces major trouble with data from Sensormatic Solutions showing that retail footfall on December 23, the last full shopping day before Christmas, fell 13.1% year on year.

Along with the higher payroll costs, which have hit smaller and medium-sized retailers worse, many industry analysts are warning of a further bloodbath across the sector this year.

In 2025, chains including Poundland and River Island were forced to turn to restructuring processes to avoid collapse. Modella also owns businesses including WH Smith’s historic high street estate, which it has rebranded as TG Jones, as well as Hobbycraft.

The US parent of Claire’s filed for bankruptcy protection last year and was eventually sold, with the new owner granting a licence to Modella to run the UK stores.

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