Claire's files for bankruptcy in the US and several other countries
In a statement, Claire's said that bankruptcy proceedings would also be initiated in Canada. The company did not provide a specific timeline. Claire's noted that stores will remain open and employees will continue to be paid.
Claire's' French subsidiary was placed in receivership in July, the lawyer representing the staff told AFP. The decision to file for bankruptcy in the US "is difficult but necessary", said Chris Cramer, CEO of Claire's since June 2024, in a statement.
"Increased competition, consumer spending trends and the continued shift away from high street retail, coupled with our current debt obligations and macroeconomic factors, necessitate this measure," Cramer continued. "We continue to hold active discussions with potential strategic and financial partners." He also mentioned the management's determination to complete a "review of strategic alternatives".
For Neil Saunders, director at GlobalData, this bankruptcy "is not really a surprise. The chain is overwhelmed by a cocktail of problems, both internal and external, that make its profitability impossible." Saunders believes that "Reinventing itself will be difficult in the current environment." The new US tariffs appear to be the final straw, which "Claire's is unable to manage effectively". He also mentioned competition from new players targeting its traditionally young clientele, such as Lovisa, and online retail with Amazon leading the way.
This is the second time Claire's has filed for Chapter 11 bankruptcy protection. In 2018, it used this process to reduce a colossal debt of 2.1 billion dollars. Founded in 1961, Claire's was acquired in 2007 by the investment firm Apollo Global Management. Approximately 3,000 shops
According to documents filed on Wednesday with a Delaware bankruptcy court, the investment firm Elliott Management is now its largest shareholder with a cumulative stake of at least 39.61 percent.
In these documents, Claire's specifies that it employs approximately 7,000 people in the US, including approximately 2,000 full-time employees, and has a network of 1,350 shops. Its debt is between one and ten billion dollars, with over 600 million due in 2026. According to Claire's website, the group operates a total of more than 2,750 stores under its name in seventeen countries across North America and Europe, as well as 190 Icing stores in North America.
It also has more than 300 franchised stores in the Middle East and South Africa and sells its products in thousands of concessions worldwide.
The latest results available on its website relate to the 2021 fiscal year. This was preliminary, unaudited data: the group forecast net sales of 1.39 billion dollars and comparable operating income between 273 and 277 million dollars. When contacted by AFP for more recent data, the group was unable to provide any at this stage.
In France, the Paris Commercial Court opened receivership proceedings on July 24, with a six-month observation period, according to the lawyer interviewed by AFP a few days later.
At the end of this observation period, the court will decide whether a continuation plan is possible, with a potential buyer, or whether liquidation, meaning the cessation of activity, should be pronounced. This article was translated to English using an AI tool.
FashionUnited uses AI language tools to speed up translating (news) articles and proofread the translations to improve the end result. This saves our human journalists time they can spend doing research and writing original articles. Articles translated with the help of AI are checked and edited by a human desk editor prior to going online. If you have questions or comments about this process email us at info@fashionunited.com
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