High Street Chains Claire's And Factory Shop Face Collapse

The UK high street has been dealt another blow as popular retailers Claire's and The Original Factory Shop have entered administration, putting around 2,500 jobs across the country at risk. This move provides a temporary reprieve, offering both chains crucial breathing space to find new buyers amidst a challenging economic climate. Claire's, a long-standing favourite for accessories among younger shoppers, operates 154 stores with 1,355 staff. The Original Factory Shop, known for its discount offerings, has 140 outlets and employs 1,220 people. Both businesses are owned by investment firm Modella Capital, which confirmed the insolvency proceedings for their UK and Ireland operations. Modella Capital stated that the decision was "very tough," highlighting "alarming" low Christmas trading figures and persistently difficult conditions that left both retailers in a "vulnerable" state. The firm had acquired Claire's just last September, following its previous collapse into administration which led to 1,000 job losses and 145 store closures. The Original Factory Shop has been under Modella's ownership since early last year. The investment company pointed to a combination of factors for the current predicament, including weak consumer confidence, rising operational costs, and what it described as "highly adverse government fiscal policies." This latest development underscores the ongoing struggles faced by traditional brick-and-mortar retailers, as shoppers increasingly move online and the cost of maintaining physical stores continues to climb. Modella isn't alone in its criticism of recent government measures. Chancellor Rachel Reeves' policies, including hiked taxes, an increased minimum wage, and higher employer National Insurance contributions, have been cited by various businesses as contributing to their financial strain. James Fitzgerald, who runs The Thatched House pub in Hammersmith, London, warned he might have to close due to a £22,000 rise in his costs over the past year, with National Insurance being a significant factor. The Treasury was approached for comment on these concerns. As these two familiar names fight for survival, their fate serves as a stark reminder of the immense pressures bearing down on the UK's retail landscape and the wider economy. --- Managing your business finances? TaxAce provides smart online accountancy services for UK businesses with flexible monthly plans. Image and reporting: https://www.bbc.co.uk | Read original article