Two UK high street chains crash into administration with 2,500 jobs and 300 stores at risk | UK | News
Hundreds of stores across two high street chains are reportedly at risk of being closed completely after entering administration. Fashion accessories brand Claire’s (UK and Ireland arm) and discount department store chain The Original Factory Shop (TOFS) employ around 2,500 staff across 300 stores.
Both companies have struggled financially in recent years and were bought by Modella Capital last year to save hundreds of stores. However, the investment firm initiated administrative proceedings following attempts to reverse the fortunes of the two companies. Claire’s UK and Ireland operations were acquired by Modella last year shortly after its American parent company, Claire’s Holdings LLC, launched insolvency proceedings. Claire’s other operations outside the UK and Ireland will not be directly affected.
About 156 stores were acquired in a partial rescue deal and about 1,000 jobs were saved, but about 145 branches were not included in the deal. But despite stringent cost-cutting measures, the UK and Ireland brand continued to face difficulties overall.
Modella Capital acquired TOFS UK in the same year before embarking on a restructuring program to turn things around. But it also went into administration in January this year and a spokesman said: “Unfortunately, we have had to commence insolvency proceedings for The Original Factory Shop (TOFS).
“This was a very difficult decision. We have worked hard to save the business, making last-ditch attempts to save it, but there is no realistic prospect of trading profitably again.”
Claire’s has a total of 1,355 employees across 154 locations in the UK and Ireland, while TOFS has approximately 1,220 employees across 140 stores. Sun.
Referring to the decision to initiate insolvency proceedings for both brands, a spokesperson for Modella Capital said it was due to the “extremely challenging” environment facing high street businesses.
“It’s a simple fact that if retailers can’t make money, they risk closure and jobs will be lost across the country,” they added.
This means a total of 2,500 UK employees are at risk of being made redundant across the two brands’ 300-odd stores as managers from both brands look for buyers to rescue them.
Failure to do so could result in chains being liquidated and stores closing. The future of specific locations is unknown at this time, but it appears they will remain in operation for now, The Sun reported.
Express.co.uk has contacted Modella Capital for more information.
