In January 2026, UK high street staples Claire’s and The Original Factory Shop entered administration, putting approximately 2,500 jobs and 294 stores at risk. Both retailers, owned by investment firm Modella Capital, filed notices of intention to appoint administrators following a "disastrous" Christmas trading period and an "alarming" drop in footfall.

Modella, which acquired the brands in the latter part of 2025, after previous financial struggles, blamed the collapse on a "perfect storm" of high cost inflation, weak consumer confidence, and adverse government fiscal policies. While Claire’s faced stiff competition from online specialists like Temu and Shein, The Original Factory Shop was severely impacted by supply chain issues following a transition to a new logistics provider. Administrators from Kroll and Interpath are currently seeking buyers, though industry experts warn that full liquidations remain a significant risk for both chains.

More on this story at Drapers

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Off-site modular construction specialist Merit Holdings has entered administration, and a creditors’ report reveals that its supply-chain partners are unlikely to recover the £17.4 million owed to them. Administrators from Interpath Advisory said cash-flow pressures triggered by contract disputes, project delays and an HMRC winding-up petition ultimately forced the business into insolvency. 

The Northumberland-based firm, which once targeted rapid growth, had seen turnover fall and sought emergency funding before the collapse, but that was insufficient to stabilise operations. Secured lenders such as Santander may recover some of what they are owed, but unsecured suppliers and subcontractors are “highly unlikely” to receive any repayment of their outstanding invoices.

All 284 of Merit’s staff were made redundant and a portion of assets was sold to a newly formed company, but it is unclear if that will generate further funds for creditors.

More on this story at Construction News

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In December 2025 Dutch lingerie retailer Hunkemöller initiated a controversial restructuring that introduced ‘creditor-on-creditor violence’ to the European market, which has sparked a major legal battle. Facing high debt and low earnings, the company has utilised a Liability Management Exercise (LME) to secure new financing.

This deal allowed a majority group of lenders to provide capital, which effectively subordinated and diluted the holdings of a dissenting minority group. This aggressive tactic, common in the U.S. but rare in Europe’s more collaborative lending environment, has sparked considerable alarm among investors.

By bypassing the need for unanimous consent, Hunkemöller successfully improved its liquidity without filing for formal insolvency. This move has potentially transformed the European credit landscape, signaling that the ‘every-man-for-himself’ tactics are no longer exclusive to American markets, ending Europe’s tradition of creditor consensus. 

Read more here.

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Latvian-based SmartLynx Airlines has ceased all commercial operations, ending 33 years as a leading European ACMI and charter provider. The shutdown follows a rapid spiral into insolvency, occurring just one month after the carrier was sold by Avia Solutions Group to its management and Dutch investment firm Break Point Distressed Asset Management.

While parent SmartLynx Latvia faced debts exceeding €238 million, the fate of its sister carriers in Estonia and Malta initially appeared separate under ASG ownership. However, recent reports indicate ASG subsequently divested these subsidiaries to the same Dutch fund. 

Estonian authorities have since revoked SmartLynx Estonia’s operating license, effectively grounding the unit. This collapse has left hundreds of employees facing unpaid wages and stranded crew members abroad. 

Read more at Flight Global

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