As Claire’s goes back into administration after just three months, InternetRetailing takes a look at the changing consumer behaviour and other headwinds that have caused the once hugely popular high street chain to struggle.
The owner of Claire’s and The Original Factory Store (TOFS) is putting both high street chains into administration. Both retailers were already close to collapse when bought by investment firm Modella Capital last year. A spokesperson for the company said: “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.”
Modella said the tough economic environment played a significant part in the decision to close the retailers, putting around 2,500 jobs at risk. “The climate on the high street remains extremely challenging, and TOFS and Claire’s are not alone in experiencing difficulties,” the spokesperson said. “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.”
Changing consumer behaviour
For Claire’s, however, the closure also points to a change in consumer behaviour, driven by the rise of online shopping and social media influencing. When the US jewellery and accessories retailer arrived on the UK high street in 1997, it tapped into an under-served market: teen and pre-teen girls who wanted to be stylish. For girls growing up in the early Noughties, getting an ear-piercing and first set of earrings at Claire’s was a rite of passage.
Initially, it shored up its identity as a fun and stylish emporium for young girls by capitalising on microtrends such as snap bracelets and tattoo chokers, popularised on Tumblr, MySpace and other teen online spaces. But as those spaces evolved and a new generation of young consumers with more sophisticated tastes replaced its original customers, Claire’s began to lose relevance.
Ongoing debt challenges
In 2007, Apollo Global Management acquired Claire’s for $3.1 billion, financing the deal with $595.7 million in equity and adding nearly $2.5 billion in debt to the company. Faced with intense online competition and declining high street footfall, Claire’s filed for bankruptcy in 2018, still burdened with $2.1 billion in debt. Restructuring provided temporary relief, and it emerged from bankruptcy in October 2018 with stores still operating. However, it filed for bankruptcy again in August 2025, still struggling with debt, with the UK arm following soon after.
On 10 November 2025, the US business was sold as a going concern for $140 million to Ames Watson, preserving over 800 stores and an estimated 17,300 jobs across the USA and Canada. In the UK, the business had suffered losses of £25 million over the past three years, due to inflation, wage increases, supply chain disruptions, US tariffs on Chinese-made goods, and waning customer interest. A notice of intention to appoint administrators was filed, with Interpath Advisory appointed to oversee the process. The administrators confirmed that the company’s 280 UK stores would remain open during the review.
In September 2025, Modella Capital, which also acquired WHSmiths’ high street businesses, purchased 156 of Claire’s stores in the UK and Ireland along with key assets, securing about 1,000 jobs. The deal was structured as an asset purchase rather than a full takeover, so Modella took on selected stores and brand rights but not the wider liabilities – a common approach in retail restructurings, where investors focus on viable parts of a business and leave legacy debts and underperforming locations behind.
The future for Claire’s
Just three months later, Claire’s is back in administration while Modella looks for a new buyer. Success will depend on finding a buyer willing to invest in a leaner, restructured estate amid tough consumer and economic conditions. Competition from the likes of ultra-low-cost retailers Temu and Shein has siphoned away typical Claire’s customers. Critics have also pointed to a clunky online experience and an in-store experience that has changed little since the Noughties as fundamental problems for the retailer.
The evolution of their market is another significant issue. Gen A girls, born from 2010 onwards and heavily influenced by social media, are sophisticated consumers of beauty products, despite their age. Often labelled ‘Sephora kids’ thanks to their love of the beauty retailer, which has combined online and in-store experience to make its stores a must-visit high street destination for teenagers and pre-teens, they actively seek out trending beauty products. In 2023, a report by NielsenIQ showed that US households with six to 12-year-olds spent nearly $4.7 billion on beauty products, driven by social media platforms such as TikTok and Instagram. It’s a market that Claire’s once tapped into – and its future depends on whether it can re-engage with these brand-conscious and image-focused young consumers.
Claire’s future now hangs in the balance. While administrators are seeking a buyer, success will depend on whether investors believe the brand can reinvent itself for a new generation of shoppers. With competition from fast-fashion giants and beauty retailers that have mastered the blend of digital and in-store experiences, Claire’s faces a stark choice: adapt to Gen A’s tastes or risk disappearing from the high street.
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