The Original Factory Shop and Claire’s Accessories are set to enter administration, putting about 2,500 jobs at risk.
Private equity owner Modella Capital said administration was the “only option” for the high street chains in an “extremely challenging” climate.
Advisory firm Interpath is to be appointed administrator.
Modella bought variety discounter The Original Factory Shops (TOFS) in February last year and Claire’s in September.
It also bought WH Smith’s high street arm last year and rebranded stores as TG Jones.
TOFS has about 140 stores following a CVA launched in April. It employs about 1,200 people. Claire’s has about 154 stores and employs about 1,300.
“Very sadly, we have had to initiate insolvency proceedings for The Original Factory Shop and Claire’s Accessories UK & Ireland,” said a Modella Capital spokesperson.
“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.
“In these circumstances, administration is the only option. In both cases, the legacy effects of trading prior to our ownership left them highly vulnerable.
“The climate on the high street remains extremely challenging and TOFS and Claire’s are not alone in experiencing difficulties.
“This is borne out by recent Sensormatic statistics and other data sources suggesting an alarming drop-off in pre-Christmas footfall.
“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.
“It’s a simple fact that if retailers can’t make money, they risk having to close – and jobs across the country are lost.”
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