Less than a week into the new year, Claire’s and The Original Factory Shop are on the cusp of administration, putting 2,550 jobs at risk.

Both chains are owned by Modella Capital. In a statement, Modella said an “extremely challenging” high street trading environment had played a key role in the decision to initiate insolvency proceedings, citing industry data that suggested an “alarming drop-off in pre-Christmas footfall.”

The investment group currently owns 154 Claire’s stores, after buying around half of the UK chain from administrators in September last year.

In a statement at the time of purchase, Joseph Price, Managing Director at Modella Capital, said: “As a firm, we strongly believe that this much-loved brand deserves the chance to remain on the High Street in the UK and Ireland.”

The discounted homewares retailer The Original Factory Shop, which operates around 140 stores, was bought by Modella less than a year ago from Duke Street Capital. The chain has now filed a notice with the High Court to appoint administrators, putting 1,200 jobs at risk.

In a statement, reported in The Telegraph and Guardian, a Modella spokesperson said: “This has been a very tough decision. 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.

“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.”