High street chains Claire’s and The Original Factory Shop have fallen into administration, putting the jobs of about 2,500 staff at risk.
The two retailers had already undergone restructuring and last year were bought by investment firm Modella Capital.
Modella purchased Claire’s in September, six weeks after its previous collapse into administration, in a deal which saw around 1,000 job losses at the retailer, while 145 stores closed. The investment firm has owned The Original Factory Shop since early last year.
“This has been a very tough decision,” said Modella. “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.”
Claire’s, which popularised brightly coloured accessories, was seeking a buyer after its US owner filed for bankruptcy last year.
Modella said both retailers had faced low Christmas trading and would enter insolvency proceedings across the UK and Ireland, giving them time to find a buyer.
Claire’s has 154 stores and 1,355 staff, while The Original Factory shop employs 1,220 staff in 140 stores.
Modella has become increasingly prominent on Britain’s high streets, having bought WH Smith’s high street chain last year and taken over arts and crafts retailer Hobbycraft a year earlier.
It criticised measures by Chancellor Rachel Reeves which have seen operating costs rise. Pressure is now mounting on the Treasury and the Finance Secretary in Scotland to respond to rising costs faced by retailers.
Five leading Business Improvement Districts are the latest to support calls from the Scottish Retail Consortium for a permanent business rate discount for all retail, hospitality, and leisure premises.
The joint plea comes ahead of the unveiling of the Scottish Government’s Budget on 13 January and in the wake of the UK Budget, which introduced a permanent business rate discount for retail, hospitality, and leisure premises in England.
The five Improvement Districts cover the cities of Aberdeen, Edinburgh, Glasgow, Inverness, and Stirling.
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