The purchaser of WH Smith’s high street chain is nearing a deal to rescue the British operations of Claire’s, the accessories retailer. This deal is expected to result in numerous store closures. Modella Capital and Interpath Advisory, the administrators of Claire’s UK and Irish operations, are set to announce the transaction imminently.
Industry insiders have indicated that while parts of Claire’s store portfolio will be preserved, a significant number of shops are likely to be closed following negotiations with suppliers and landlords. Job cuts are also anticipated at Claire’s UK head office as part of Modella’s plans, which involve consolidating functions with its TG Jones and Hobbycraft businesses.
Last week, Sky News reported that Modella had reached an agreement with Claire’s new US-based owner, private equity firm Ames Watson, to acquire the UK chain. Modella outbid competitors such as Touker Suleyman and Doug Putman, the owner of HMV.
Claire’s operates 278 stores in the UK and 28 in Ireland, employing approximately 2,100 individuals. Interpath had previously stated that all stores would remain open as they explored options for the business.
Modella has swiftly become a major investor in brick-and-mortar retail in the UK. The company also owns The Original Factory Shop and Hobbycraft, both of which underwent restructuring after being acquired by Modella.
Claire’s, a longstanding presence in British shopping centers, is one of the largest high street chains to face insolvency this year. The brand is particularly popular among teenage shoppers. Despite running a sales process prior to administration, Claire’s was unable to secure a solvent deal.
The collapse of Claire’s UK operations occurred shortly after its US parent company filed for Chapter 11 bankruptcy protection. The company was previously owned by creditors Elliott Management and Monarch Alternative Capital following a financial restructuring.
Will Wright, UK chief executive at Interpath, expressed optimism about the future of Claire’s. He emphasized the brand’s popularity and the efforts to operate stores as a going concern while exploring options for the company, including a potential sale.
Interpath and Modella have chosen not to provide further comments at this time.
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