Retail experts warn more high street brands could fall into administration as online platforms reshape UK shopping habits
Retail experts have warned that competition from online retailers is putting the squeeze on high street brands, following the announcement that Claire’s and The Original Factory Shop (TOFS) were being placed into administration.
According to Nicholas Found, head of commercial content at Retail Economics, Claire’s failed to “evolve fast enough” to compete with “nimble online platforms” such as Temu and TikTok Shop.
He said Temu’s rock-bottom pricing and TikTok Shop’s capacity to convert social media users into buyers has eroded the significance of traditional high street retailers, “especially in fashion accessories where impulse buys are easy to substitute”.
Sean Moran, a restructuring and insolvency partner at Shakespeare Martineau, echoed similar concerns, noting that the fashion and accessories sector has been swamped by fresh competition from digital retailers in recent years, heaping additional pressure on bricks-and-mortar brands.
He warned: “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”.
On Monday, Modella Capital announced it was placing Claire’s and TOFS into administration, putting 2,500 jobs at risk of redundancy.
The investment firm, which controls both retail chains, pointed to fragile consumer confidence and persistent cost inflation as primary factors behind launching insolvency proceedings. Helen Dickinson, chief executive of the British Retail Consortium (BRC), has acknowledged that escalating living costs have fostered a tough trading climate for retailers, making “it is little surprise to see some businesses falling into administration”.
She warned that “The situation could become worse if government policies add significantly to this burden in 2026”.
Modella highlighted how punishing retail conditions, compounded by government policies, were causing British businesses like Claire’s to “suffer badly”.
Audit and consulting firm RSM UK has forecast that the retail sector will continue to wrestle with shaky consumer confidence in 2026, alongside mounting pressure from influencers and social media brands.
Jacqui Baker, its head of retail, pointed to 2025 witnessing the “growing dominance of social media in the retail sector, particularly when it comes to product discovery”.
She explained that “Younger consumers (18-24 years old) are more likely to discover products through TikTok and Instagram than search engines,”.
Meanwhile, Mr Found emphasised that high street brands like Claire’s still possess worth but that “sustained relevance requires a reset, including sharper positioning, storytelling, and a clear understanding of what their target customers value today”.
