Claire's and The Original Factory Shop (TOFS) are being put into administration, after their owner said "last-ditch" measures had fallen through, putting about 2,500 UK staff at risk of redundancy.
The two retailers had already undergone restructuring and were bought by investment firm Modella Capital last year.
Modella said it had made the "tough decision" to kickstart insolvency proceedings for the businesses.
It will mean 1,355 employees in the UK and Ireland at 154 Claire's shops will be put at risk, and 1,220 staff across 140 TOFS' stores.
A spokesman for the company said: "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".
"In these circumstances, administration is the only option. In both cases, the legacy effects of trading prior to our ownership left them highly vulnerable," he added.
Modella said tough retail conditions, including from government policies, were causing businesses to "suffer".
"The climate on the high street remains extremely challenging, and TOFS and Claire's are not alone in experiencing difficulties," the firm said.
"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," he added.
"It's a simple fact that if retailers can't make money, they risk having to close, and jobs across the country are lost," he stated.
