Claire’s, the Illinois-based retail chain known for its earrings and piercing services, filed for Chapter 11 bankruptcy, the company announced on Aug. 6.
The move, which came less than four years after Claire’s went public, marks the second bankruptcy in seven years. The retailer cited macroeconomic conditions as pushed ahead with Chapter 11 proceedings.
Claire’s ranked No. 390 in the Top 2000 prior to its bankruptcy filing. The Top 2000 Database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales. There, it falls under the Jewelry category. Also prior to the bankruptcy, Digital Commerce 360 projected Claire’s online sales in 2025 will reach $201.02 million.
Claire’s web sales by year
Why Claire’s filed for Chapter 11 bankruptcy
Claire’s latest bankruptcy comes as the company finds itself in the position of facing debt obligations amid shifting consumer behavior. The retailer cited both of these issues alongside concerns about the economy.
“This decision is difficult, but a necessary one,” said Chris Cramer, CEO of Claire’s. “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.”
The filing applies to Claire’s Holdings LLC, along with U.S. and Gibraltar-based subsidiaries. Meanwhile, Claire’s Canadian affiliate, Claire’s Canada, intends to pursue similar action in Ontario.
“We remain in active discussions with potential strategic and financial partners and are committed to completing our review of strategic alternatives,” Cramer stated.
Will Claire’s stores remain open?
For the time being, Claire’s expects to keep its retail stores in North America open as it explores 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,” Cramer said. “We remain committed to serving our customers and partnering with our vendors and landlords in other regions during this time.”
In the meantime, Claire’s expects to continue paying wages and benefits to its employees as proceedings in the U.S. and the Canada move forward. According to its public announcement, Claire’s U.S. intends to seek approval for the use of cash collateral to fund ongoing operations.
Claire’s lists Omni Agent Solutions as its claims agent and has posted additional information about the bankruptcy on Omni’s website. Kirkland & Ellis LLP will serve as the company’s legal counsel. It is also working with Houlihan Lokey as an investment banker and Alvarez & Marsal as a restructuring advisor. Its legal counsel in Canada is Osler, Hoskin & Harcourt LLP.
Do you rank in our databases?
Submit your data and we’ll see where you fit in our next ranking update.
Sign up
Stay on top of the latest developments in the online retail industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News. Follow us on LinkedIn, X (formerly Twitter), Facebook and YouTube. Be the first to know when Digital Commerce 360 publishes news content.
Favorite