Claire's UK arm falls into administration: What's at stake?
On Wednesday, it was confirmed that advisers at Interpath had been appointed to oversee the administration process of Claire's Accessories UK Ltd, Claire's European Services Limited and Claire's European Distribution Limited.
While all of the retailer's 306 stores in the UK and Ireland and its headquarters in Birmingham are expected to continue trading, fears have heightened over the 2,150 jobs at risk across the two regions.
To mitigate this concern, Interpath said that, 'as a matter of priority', joint administrators, Will Wright and Chris Pole, will contact Claire's employees in the UK and Ireland to inform them of what the administration may mean. 2,150 jobs at risk as Claire's fails to find buyer
Elsewhere, online orders for the company have now been put on hold, with those placed and dispatched prior to the administration expected to be delivered, while those not yet shipped will be withheld. Refunds will also not be issued.
Interpath said it would now assess options for the business, 'including exploring the possibility of a sale as a going concern'.
In a statement, Interpath's UK CEO, Will Wright, said: 'Claire's has long been a popular brand across the UK, known not only for its trend-led accessories but also as the go-to destination for ear piercing.
'Over the coming weeks, we will endeavour to continue to operate all stores as a going concern for as long as we can, while we assess options for the company. This includes exploring the possibility of a sale which would secure a future for this well-loved brand.'
Its descent into administration comes as the retailer had failed to find a buyer for its UK business, with speculated bidders, including Hilco Capital, previously said to have pulled out of the process due to the scale of Claire's issues.
Claire's, which operates its namesake brand as well as Icing, is facing a 496 million dollar long-term debt, due December 2026.
As part of a bankruptcy process launched earlier this month, the company has been working with Interpath Advisory to explore both a sale or restructuring options for its North American business, for which stores are also expected to remain operational as the process moves forward.
In the US filing, Chris Cramer, CEO of Claire's said 'increased competition, consumer spending trends and the ongoing shift away from brick-and-mortar retail, in combination with our current debt obligations and macroeconomic factors' were primary drivers behind the bankruptcy.
According to court documents, Claire's employs around 7,000 people across the US throughout 1,350 stores. In France, meanwhile, where the company is currently undergoing a similar procedure, Claire's had around 250 stores, with 800 staff, as of the beginning of 2024.
Read more: From bounce-back to bankruptcy: Inside Claire's renewed financial struggles
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