Thousands of high street jobs are hanging in the balance as investment firm Modella Capital has initiated insolvency proceedings for two of its prominent retail holdings: Claire’s Accessories UK & Ireland and The Original Factory Shop (TOFS). The move, announced on Monday, will place approximately 2,550 employees across more than 300 stores under threat of redundancy, including those in stores in Aberdeen’s Trinity Centre and Stonehaven.
Modella Capital, a London-based private equity firm specialising in retail turnarounds, acquired The Original Factory Shop in February 2025 from Duke Street Capital and rescued 156 Claire’s stores in the UK and Ireland from administration in September 2025, following the US parent company’s bankruptcy. This latest development marks a challenging start to 2026 for the UK retail sector.
A spokesperson for Modella Capital articulated the gravity of the situation, stating: “Very sadly, we have had to initiate insolvency proceedings for The Original Factory Shop (TOFS) and Claire’s Accessories UK & Ireland. This has been a very tough decision.”
The firm attributed the collapse to “a combination of very weak consumer confidence, highly adverse government fiscal policies and continued cost inflation.”
For Claire’s, a total of 1,355 employees across 154 stores in the UK and Ireland are at risk, while 1,220 staff across 140 The Original Factory Shop outlets face similar uncertainty. Sky News reported that Interpath Advisory is expected to oversee TOFS’s administration, with Kroll handling Claire’s. The intention is for administrators to continue trading both businesses while seeking potential buyers.
The broader economic climate has indeed proven formidable for UK retailers. Consumer confidence, despite a marginal uptick to -17 in December 2025, remains subdued, with many households expressing concern over the wider economy and limiting discretionary spending. An “alarming drop-off in pre-Christmas footfall” further exacerbated the situation for many high street brands, leading to a bleak festive trading period.
Modella Capital has established itself as a significant player in the UK retail industry’s distressed asset market, with a portfolio that includes Hobbycraft, acquired in August 2024, and TGJones, the rebranded high street division of WHSmith, purchased in June 2025. However, the challenges at Claire’s and TOFS underscore the persistent difficulties facing physical retail.
As 2026 unfolds, analysts predict a continued challenging period for the UK high street, with further store closures anticipated amidst ongoing economic uncertainty and shifting consumer habits towards online shopping. The fate of thousands of retail jobs now rests on the ability of administrators to find viable new owners for these long-standing brands.
