Competition from online retailers are squeezing high street brands, retail experts have said, after it was announced that Claire’s and The Original Factory Shop (TOFS) were being put into administration.
Claire’s could not “evolve fast enough” to compete with “nimble online platforms” such as Temu and TikTok Shop, according to Nicholas Found, head of commercial content at Retail Economics.
Temu’s ultra-low pricing and TikTok Shop’s ability to turn its social media users into customers has diminished the relevance of traditional high street players, “especially in fashion accessories where impulse buys are easy to substitute”, he said.
Similarly, Sean Moran, a restructuring and insolvency partner at Shakespeare Martineau, said the fashion and accessories industry has been overwhelmed by new competition from online retailers in recent years, putting increased pressure on high street brands.
“These tough market conditions will by no means only be affecting Claire’s, and we may well see other retail giants struggle in the coming months”, he said.
Modella Capital said on Monday that it was putting Claire’s and TOFS into administration, putting 2,500 staff at risk of redundancy.
The investment firm, which owns the two retail chains, cited weak consumer confidence and continued cost inflation as key reasons for starting insolvency proceedings.
Helen Dickinson, chief executive of the British Retail Consortium (BRC), has said the rising cost of living has created a challenging environment for retailers, so “it is little surprise to see some businesses falling into administration”.
“The situation could become worse if government policies add significantly to this burden in 2026”, she added.
Modella said tough retail conditions, including those from government policies, were causing British businesses like Claire’s to “suffer badly”.
Audit and consulting firm RSM UK predicted that the retail sector will continue to grapple with fragile consumer confidence in 2026, along with competing influence from influencers and social media brands.
Jacqui Baker, its head of retail, said 2025 saw the “growing dominance of social media in the retail sector, particularly when it comes to product discovery”.
“Younger consumers (18-24 years old) are more likely to discover products through TikTok and Instagram than search engines,” she said.
Meanwhile, Mr Found stressed that high street brands like Claire’s still have value but that “sustained relevance requires a reset, including sharper positioning, storytelling, and a clear understanding of what their target customers value today”.
