Collapse of Claire’s UK Operation
The UK operation of accessories retailer Claire’s has collapsed just four months after its latest bankruptcy, putting more than 1,000 retail jobs at risk.
Administration Appointment
Insolvency practitioners from Kroll were officially appointed as administrators of Claire’s in the UK and Ireland. This move comes three weeks after the chain’s owner, Modella Capital, filed a notice of intent to appoint administrators for both Claire’s and TOFS, the discount retailer the chain acquired last year.
Statement from Administrators
In a statement, Kroll said: "The company will continue trading during this period." This indicates that despite the administration appointment, Claire’s stores will remain open for the time being.
Background
Modella bought the company last September, several months after Claire’s filed for bankruptcy in both the United States and the United Kingdom. The company had previously traded in almost 300 stores across the UK but was hit by changes in consumer behavior among its traditional youth customer base.
Challenges Facing the Retailer
Retail analysts are skeptical that many of Claire’s remaining 156 stores in Britain and Ireland will find a buyer. Sources familiar with the situation said that a combination of government policy, with a significantly increased tax burden on retailers, and demands from landlords to take back parts of Claire’s stores had made the chain’s future unviable. The retail sector continues to face significant headwinds, with chains such as Poundland closing a significant number of stores.
Impact on Jobs and Operations
Before the company was purchased by Modella, numerous jobs were lost as part of restructuring processes. The current collapse puts more than 1,000 retail jobs at risk, adding to the uncertainty in the retail sector.
Owner’s Portfolio
Modella also owns businesses including the historic Main Street property of WH Smith, renamed TG Jones, and Hobbycraft. The collapse of Claire’s UK operation is a significant setback for the company, which had hoped to turn around the fortunes of the struggling retailer.
