The collapse of Claire’s UK business has become a useful example of two issues that often attract attention in insolvency:
How much complex administrations can cost, and why a sale out of administration does not necessarily guarantee the long-term survival of the rescued business.
New reporting on 22 September 2026 suggests that professional fees connected with the two Claire’s UK insolvencies could exceed £7 million, while significant unsecured creditor claims are expected to receive no return.
The figures are striking, but they also need context.
Large retail administrations can involve hundreds of stores, thousands of employees, landlords, stock, suppliers, secured creditors, international operations and an urgent sale process.
Claire’s demonstrates just how complicated that can become.
What happened to Claire’s?
Claire’s Accessories UK Ltd entered administration in August 2025, following financial difficulties affecting the wider Claire’s group.
At the time, the UK and Ireland business operated 306 stores and employed more than 2,150 people.
Interpath administrators initially continued trading while exploring whether a sale of the business could be achieved.
A deal was subsequently agreed with investment firm Modella Capital.
In September 2025, substantially most of the business and assets were sold, with 156 stores transferring and around 1,000 jobs being preserved.
On the face of it, that was a rescue.
But the story did not end there.
The rescued business later entered administration
The Claire’s business acquired by Modella was operated through CAUKI Limited.
That company subsequently experienced its own financial difficulties and entered administration in January 2026.
This resulted in further store closures and job losses.
Reporting by The Times says CAUKI subsequently had around £10.6 million in unsecured creditor claims.
This highlights an important point about insolvency rescue sales:
a successful sale out of administration preserves a business at that moment in time, but it does not guarantee that the purchaser or successor business will remain viable indefinitely.
The new company still has to operate profitably after the acquisition.
Why are the fees attracting attention?
According to reporting published by The Times, the two insolvencies could generate more than £7 million in administration and advisory fees.
Interpath is reportedly seeking an additional £3.2 million of remuneration in connection with the original Claire’s Accessories UK administration.
The report says senior staff were charged at rates reaching £1,515 per hour.
At the same time, unsecured creditors in that administration are reportedly owed approximately £11.9 million and are currently expected to receive no distribution.
The contrast between professional fees and creditor returns inevitably attracts attention.
But it is important not to assume that a high professional fee automatically means something has gone wrong.
Why can large administrations cost so much?
An administration involving a national retailer can be enormously complex.
Work can include:
- continuing to trade hundreds of stores;
- dealing with thousands of employees;
- managing payroll;
- dealing with landlords across a large property portfolio;
- securing and selling stock;
- negotiating with secured lenders;
- running a competitive sale process;
- dealing with customer claims;
- managing international group issues;
- liaising with HMRC and other government bodies;
- dealing with redundancy claims;
- negotiating asset sales;
- preserving intellectual property and goodwill; and
- complying with extensive statutory reporting obligations.
The administrators may also have to make decisions extremely quickly.
For a retail business, every additional trading day can create new liabilities for wages, rent, utilities, logistics and stock.
That is very different from the administration or liquidation of a small owner-managed business.
How are administrators’ fees approved?
Administrators do not simply decide what they wish to charge and automatically take that amount.
Their remuneration must be fixed in accordance with the insolvency legislation and rules.
Depending on the circumstances, approval may be obtained from:
- a creditors’ committee;
- creditors;
- secured creditors and preferential creditors; or
- the court.
Administrators are also required to provide information about the work undertaken and how their remuneration has been calculated.
Creditors therefore have rights to scrutinise insolvency remuneration.
In larger cases, this can become a significant issue where professional costs are substantial but returns to creditors are limited.
Why can creditors receive nothing even where assets have been sold?
A common misunderstanding is that selling a business for millions of pounds must mean there is substantial money available for ordinary creditors.
That is not necessarily the case.
Sale proceeds may need to meet claims or costs ranking ahead of unsecured creditors.
Depending on the circumstances, these can include:
- assets subject to fixed-charge security;
- administration expenses;
- employee liabilities incurred during the administration;
- preferential creditor claims;
- secured lending;
- the prescribed part; and
- other costs associated with preserving and realising the business.
By the time the statutory distribution waterfall reaches ordinary unsecured creditors, very little — or sometimes nothing — may remain.
That is why the headline sale price does not necessarily indicate what creditors will ultimately receive.
What happened to Claire’s unsecured creditors?
The latest reporting indicates that unsecured creditors of Claire’s Accessories UK Ltd are owed approximately £11.9 million and are expected to receive no distribution.
Companies House records confirm that the company remains in administration and that the administration period was extended in July 2026.
For creditors, this is another reminder that insolvency recoveries depend on much more than the apparent value of a business before or during a sale.
Did the original Claire’s administration achieve anything?
Yes.
Although the subsequent failure of CAUKI is clearly significant, the original administration resulted in a transaction which transferred 156 stores and preserved around 1,000 jobs at the time of the sale.
That matters when assessing what an administration achieved.
The statutory purposes of administration are broader than simply generating a dividend for unsecured creditors.
Depending on the circumstances, an administrator may seek to:
- rescue the company as a going concern;
- achieve a better result for creditors than would be likely in a winding up; or
- realise property for secured or preferential creditors.
A business sale can therefore represent a successful outcome even where unsecured creditor recoveries remain poor.
Equally, what happens to the purchaser afterwards is not necessarily something the original administrators can control.
Why does this matter for directors considering administration?
Directors sometimes assume administration means a company is being “saved”.
That is an oversimplification.
Administration is a formal insolvency procedure designed to achieve one of its statutory purposes.
Sometimes that results in the company itself surviving.
Sometimes the business and assets are sold to another company.
Sometimes stores or divisions are closed while viable parts of the business are preserved.
And sometimes an administration ultimately moves into liquidation.
The right outcome depends entirely on the circumstances.
A sale does not remove the underlying commercial challenges
Perhaps the most interesting lesson from Claire’s is what happened after the first sale.
Buying a business out of administration can remove certain historic liabilities and give the operation a fresh start.
It cannot automatically solve underlying issues such as:
- excessive property costs;
- weak trading performance;
- changing consumer behaviour;
- poor cash flow;
- high operating costs;
- insufficient working capital; or
- an unsustainable business model.
If those underlying issues remain, a rescued business can face financial difficulty again.
Claire’s is a high-profile example of that risk.
What should directors take from this?
For smaller companies, the practical lesson is not really about whether £7 million of professional fees is too much or too little.
The more useful lesson is that insolvency becomes more complicated and expensive as problems escalate.
Directors should therefore take advice while there are still options available.
If a company is struggling, early advice may make it possible to consider:
- refinancing;
- a Time to Pay arrangement;
- restructuring;
- a sale of part or all of the business;
- a Company Voluntary Arrangement;
- administration; or
- a Creditors’ Voluntary Liquidation.
Waiting until cash has run out, employees cannot be paid or creditor enforcement has begun can substantially reduce those options.
Concerned about your company?
DCA Business Recovery provides confidential insolvency advice to directors throughout England and Wales.
We are a family-run insolvency practice based in Southend-on-Sea.
Taking advice does not mean you have decided to liquidate your company.
Our role is to understand what has happened, explain the available options and help you decide what happens next.
If we believe there is a genuine reason why you should not liquidate, we will tell you.
You can also get an indication of the cost of a Creditors’ Voluntary Liquidation using our online quote tool.
If your company is experiencing financial pressure, getting advice earlier normally gives you more options.
This article is provided for general information only and should not be treated as legal or insolvency advice. The circumstances and creditor outcomes of every insolvency are different.
