Jewelry retailer Claire’s has filed for its second bankruptcy in seven years, amid mounting financial difficulties.
On Wednesday, the company filed for Chapter 11 bankruptcy with the U.S. bankruptcy court in Delaware. This follows its first bankruptcy filing in March 2018, which it emerged from in October of that year.
Why It Matters
Claire’s operates around 2,750 stores across 17 countries worldwide, but the filing could result in the closure of many locations as the company attempts to restructure and manage its substantial debt burden.
The struggles of the Chicago-headquartered company, long a fixture in malls across the U.S., underscores the difficulties facing American retailers this year. In addition to long-term declines in foot traffic and an increasingly competitive e-commerce environment, many businesses are grappling with strained consumer budgets as well as the potential operational and financial impacts of steep tariffs.
What To Know
According to a court filing, Claire’s has estimated assets and liabilities both ranging between $1 billion and $10 billion. Claire’s also reported having between 25,000 and 50,000 creditors.
The retailer is now primarily owned by Elliott Management Corp. and Monarch Alternative Capital, creditors who assumed control following its first bankruptcy in 2018. The company was able to emerge from Chapter 11 in 2018 after a restructuring plan eliminated around $1.9 billion in debt.
According to Fashion Network UK, Claire’s operated over 3,300 stores in early 2018 before filing for Chapter 11.
Earlier this year, reports emerged that Claire’s was considering a sale amid struggling sales, difficulties paying down loans, and tariff pressures. Bloomberg reported in May that the company had been consulting leading global investment bank Houlihan Lokey to advise it on how to shore up its finances and navigate the challenging environment.
Meanwhile, British newspaper The Telegraph reported in July that the company had recruited a number of advisers to help find a buyer for its nearly 300 U.K. locations.
According to trade data platform ImportInfo.com, Claire’s primarily imports its products from overseas manufacturers—particularly in China—leaving it especially vulnerable to the steep import duties that have been announced by President Donald Trump during his second term.
What People Are Saying
CEO Chris Cramer, in June 2024, said in a statement that his focus would be to “build on the Company’s recent momentum, strengthen our relationships with our customers, partners, and employees, and further realize our growth potential.”
What Happens Next?
Newsweek has contacted Claire’s via email for comment on the bankruptcy filing, and how it intends to emerge from the Chapter 11 process.
The post Claire’s Faces Stores Closing Across US As Retailer Files for Bankruptcy appeared first on Newsweek.
