Despite optimism for some, it looks to be another difficult year for high street retail. Naturally, there will have been a boost in sales over the Christmas period however, as the public’s new year’s resolutions take effect, which commonly include tightening purse strings after an expensive festive period, the retail industry will anxiously be looking at what lies ahead.
Not long into the new year and we have already seen our first casualties in the retail sector, with Claire’s and The Original Factory Shop both entering Administration. You may be thinking – haven’t I seen this before, and you’d be right as Claire’s had undergone restructuring as recently as September 2025. Modella Capital, who bought Claire’s last year and owns The Original Factory Shop, has cited difficult trading conditions and lower than expected trading over the Christmas period culminating in the downward spiral of the business’ financial projections.
The reasons stated for failure are not uncommon, and there are numerous factors which are contributing to tightening margins in retail, and it will be no surprise to see further businesses entering Administration in the short term.
Competition from online retailers will inevitably have contributed to recent retail failures and it remains a constant thorn in the side for high street retailers with sales on the decline. Loyalty is another factor relied upon from consumers, however, with an increased variety of products available and online trends leading consumers away from their normal go-to brands, this change in buying behaviour is clearly impacting sales for retailers.
The changes in the 2025 Autumn Budget will also now be playing its part in impacting the bottom line for retailers over the next year and beyond. Increases in the National Living Wage and Employers NIC, mean it is now increasingly expensive to maintain a larger workforce. Mixed in with other factors such as high inflation impacting household budgets and slower consumer spending, it is easy to see why profit margins remain under strain.
The news about Claire’s and The Original Factory Shop will not be welcomed by the retail industry and we all hope there is resilience throughout high street retail to ensure it is never lost to the annals of history.
Our Restructuring and Insolvency Services
At Menzies, we understand that insolvency is a challenging time for both individuals and businesses. Our team of expert advisors work alongside you to provide clear, pragmatic solutions that are tailored to your unique circumstances. Whether you’re facing corporate insolvency, dealing with personal debt issues, or involved in relevant contentious insolvency matters, our aim is to always minimise disruption and help you navigate the complexities of the insolvency process. We offer an empathetic, professional approach, combining technical knowledge with practical solutions to achieve the best possible outcomes.
Contact Our Experts
