Hundreds of stores across two major high street chains are reportedly at risk of being shuttered for good after going into administation. Fashion accessories brand Claire’s (The UK and Ireland arm) and The Original Factory Shop (TOFS), a discount department store chain, employ some 2,500 staff with 300 stores between them.
Both firms have struggled financially in recent years and were bought by Modella Capital last year to save hundreds of stores. However, the investment firm subsequently initiated administration proceedings following attempts to turn the fortunes of the two companies around. Claire’s UK and Ireland operations were bought up by Modella last year shortly after its American parent Claire’s Holdings LLC initiated bankruptcy proceedings across the pond. Claire’s other operations outside of the UK and Ireland are not directly impacted.
A partial rescue deal saw around 156 stores bought with some 1,000 jobs saved, though around 145 branches were not included in the deal. But despite the tough cost-cutting measures, the overall UK & Ireland brand continued to face difficulties.
Modella Capital bought TOFS UK the same year before initiating a restructuring programme to try and turn it around. But it also went into administration in January this year, with a spokesperson saying: “Very sadly, we have had to initiate insolvency proceedings for The Original Factory Shop (TOFS).
“This has been a very tough decision. We have worked intensively in an effort to save the business, having made last-ditch attempts to rescue it, but there isn’t a realistic possibility of trading profitably again.
Claire’s employees a total of some 1,355 people across the UK and Ireland across 154 locations, while TOFS has around 1,220 workers across 140 stores, as per The Sun.
Referring to the decision to initiate insolvency proceedings for both brands, a spokesperson for Modella Capital said it was due to “extremely challenging” climate faced by high street businesses.
“It’s a simple fact that if retailers can’t make money, they risk having to close – and jobs across the country are lost,” they added.
It means a total of 2,500 UK employees are at risk of redundancy across the two brands’ 300-odd stores, as administrators for both brands seek buyers to save them.
Failure to do so may see the chains liquidated, and the stores closed. The future of specific locations is currently unknown but it is understood that they will be kept in operation for the time being, The Sun reports.
Express.co.uk has reached out to Modella Capital for more information.