People shop at a Claire’s in New York on March 17, 2018. Claire’s filed for bankruptcy earlier this week and could potentially sell of hundreds of stores around the country.
The Associated Press File Photo
EDINBURGH — Mall-based accessories retailer Claire’s has filed for bankruptcy, with stores in Greenwood and Edinburgh potentially on the chopping block.
Claire’s began voluntary Chapter 11 bankruptcy proceedings Wednesday in the U.S. Bankruptcy Court for the District of Delaware. This move will allow Claire’s to potentially sell off hundreds of stores across the country, including its namesake and Icing brands.
Most Claire’s and Icing stores will stay open for now in North America, with only 18 locations slated to close by early September, according to the company’s initial filing. None of the company’s local stores — the Claire’s and Icing stores at the Greenwood Park Mall and the Claire’s at the Indiana Premium Outlets in Edinburgh — are on the initial closure list.
However, Claire’s has also asked the court for permission to potentially close another 1,100 standalone stores, plus 207 locations inside Walmart stores, later this year. This additional list does include the Greenwood and Edinburgh locations, with store-closing sales planned at these locations from Aug. 8 through Oct. 31 — unless the landlords of those stores object after being notified, according to a Friday court filing.
Along with filing for bankruptcy in the U.S., Claire’s Canadian affiliate is also planning to begin bankruptcy proceedings in Canada. All of the proceedings will enable Claire’s to immediately commence the monetization process for its assets to maximize value for the business, while continuing an active and comprehensive review of strategic alternatives, including discussions with potential strategic partners that began prior to the filings, according to a news release from the company.
In a court filing, Claire’s said its assets and liabilities range between $1 billion and $10 billion.
“This decision is difficult, but a necessary one. 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, necessitate this course of action for Claire’s and its stakeholders,” said Chris Cramer, CEO of Claire’s, in the news release. “We remain in active discussions with potential strategic and financial partners and are committed to completing our review of strategic alternatives.
“I’d like to express my gratitude for our employees, who have continued to work diligently in a constantly evolving consumer landscape to deliver amazing products and experiences for our customers. We remain committed to serving our customers and partnering with our vendors and landlords in other regions during this time,” Cramer continued.
This is the second time since 2018 Claire’s has filed for bankruptcy. It was also for a similar reason: high debt load and the shift among teens heading online away from physical stores.
Like many retailers, Claire’s was also struggling with higher costs tied to President Donald Trump’s tariff plans, analysts said.
Neil Saunders, managing director of GlobalData, a research firm, noted in a note published Wednesday that Claire’s bankruptcy filing comes as “no real surprise.”
“The chain has been swamped by a cocktail of problems, both internal and external, that made it impossible to stay afloat,” he wrote.
Saunders noted that internally, Claire’s struggled with high debt levels that made its operations unstable and said the cash crunch left it with little choice but to reorganize through bankruptcy.
He also noted that tariffs have pushed costs higher, and he believed that Claire’s is not in a position to manage this latest challenge effectively.
Competition has also become sharper and more intense over recent years, with retailers like jewelry chain Lovisa offering younger shoppers a more sophisticated assortment at low prices. He also cited the growing competition with online players like Amazon.
“Reinventing will be a tall order in the present environment,” he added.
The Associated Press contributed to this report.
