Claire's, the teen mall favorite known for ear piercings and sparkly accessories, has filed for Chapter 11 bankruptcy—again. The company first fell into bankruptcy in 2018, a victim of the slow but steady exodus of shoppers from US malls as online shopping grew in popularity. Now navigating its second round of bankruptcy proceedings in Delaware, Claire's listed both assets and liabilities somewhere in the $1 billion to $10 billion range. CEO Chris Cramer called the move "difficult, but a necessary one," blaming a slew of challenges: mounting competition, changing shopping habits, sagging in-store foot traffic, and an ever-present cloud of debt, per CBS News.
Experts suggest Claire's will need to use bankruptcy to trim down and focus on the stores that still draw crowds. Claire's plans to keep its more than 2,750 stores in 17 countries open for now while it weighs "strategic alternatives." That's corporate-speak for exploring everything from restructuring to possibly selling off portions of the business. The New York Times reports that for a brief moment, it looked like things had turned around for the chain: Deals with companies like Walmart gave its products wider exposure, leading to a 50% increase in YOY sales in 2021; an IPO was teased, but the company backed off those plans in June 2023.
Retail analysts say the current situation is a tangled one. Neil Saunders of GlobalData notes the chain faces a "cocktail of problems," from its debt burden to fierce competition from trendier rivals like Lovisa, which may have a better read on what today's teens want. Sarah Foss of Debtwire points out that Claire's old-school mall formula is increasingly out of step as Gen Z shops online—a criticism also applied to the two-time bankrupt Forever 21. Tariffs haven't helped either, hiking costs at a time when every dollar counts. That leaves Claire's to try to pierce through the retail gloom without losing its sparkle.
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