Thousands of high street jobs are at risk after The Original Factory Shop filed for administration and Claire’s Accessories lined up restructuring advisers amid fears of a second insolvency.
Both retailers are owned by Modella Capital, which employs around 2,500 staff across more than 300 stores, including Aberdeen's Trinity Centre and Stonehaven.
The firm blamed a “combination of very weak consumer confidence, highly adverse government fiscal policies and continued cost inflation” for the collapse.
TOFS is expected to appoint Interpath Advisory, while Claire’s is lining up Kroll, according to Sky News.
A spokesperson for Modella Capital said: “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.
“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. In these circumstances, administration is the only option. In both cases, the legacy effects of trading prior to our ownership left them highly vulnerable.
“The climate on the high street remains extremely challenging, and TOFS and Claire’s are not alone in experiencing difficulties.”