Claire's stores in Ireland facing insolvency as rescue attempt fails

Fashion retailer has stores across Ireland 

Fashion and accessories retailer Claire’s is on the brink of administration, putting dozens of jobs in Ireland at risk. Picture: PA

Fashion and accessories retailer Claire’s is on the brink of administration, putting dozens of jobs in Ireland at risk.

Claire's is owned by Modella Capital, a private equity firm, which recently bought the high street arm of WH Smith – renamed TG Jones.  A majority of Claire’s Irish and UK business assets were bought by Modella last September after parent company, Claire’s Holdings LLC, commenced Chapter 11 proceedings in the United States.

Modella said in a statement that the climate on UK high streets was “extremely challenging” and data suggested “an alarming drop-off in pre-Christmas footfall”.

Modella also owns the UK-based The Original Factory Shop chain. Modella said administration was the “only option” for both Claire’s and The Original Factory Shop, and it had started insolvency proceedings for both chains.

The investment group has 154 Claire’s stores after buying about half the UK chain from administrators in September last year. It is understood that the advisory firm Kroll is lined up to handle the proposed administration, which would affect about 1,350 jobs in Ireland and the UK at the accessories and ear-piercing chain.

Modella said on Monday: “This has been a very tough decision. We have worked intensively in an effort to save both businesses, having made last-ditch attempts to rescue them, but neither has a realistic possibility of trading profitably again.

“A combination of very weak consumer confidence, highly adverse government fiscal policies and continued cost inflation is causing many established and much-loved businesses to suffer badly.” 

The decision to call in administrators at Claire’s and The Original Factory Shop, first reported by Sky News, emerged just days after the small upmarket fashion chain LK Bennett filed an application with the high court to appoint an administrator to the business, which employs about 280 staff.

A warm autumn and start to the winter has also affected fashion retailers in the UK with the latest Worldpanel by Numerator UK clothing survey, previously known as Kantar, indicating fashion sales fell 1.4% in the four weeks to 7 December.

Guardian