Accessories retailer Claire’s is closing 291 of its stores across the country, according to a court filing in Delaware, as part of its bankruptcy process.
Last week, Claire’s, the store well-known for its ear piercing services and teen fashion accessories, announced its agreement with an affiliate of Ames Watson, a private holding company, for Ames Watson to acquire Claire’s business operations in North America.
This came after the retailers filed a list of its closing stores and those remaining open with the U.S. Bankruptcy Court for the District of Delaware.
Newsweek reached out to Claire’s via email for comment.
Why It Matters
This is the second time in seven years that Claire’s has filed for bankruptcy. In 2018, Claire’s filed for Chapter 11 bankruptcy protection after accumulating a significant amount of debt alongside growing competition from stores offering online purchasing services.
Claire’s is not alone in being affected by the rise in internet shopping, online retailers like Shein gathering more popularity among teens, and private equity buyouts. A number of other stores have also recently filed for bankruptcy or are facing store closures, including At Home, Big Lots, Joann Fabrics, Kohl’s, JCPenney, and Party City.
What To Know
Among the closing stores listed in Claire’s court filing, California, New York, Illinois and Pennsylvania were among the most affected states. In California, 25 stores are set to close, with 18 closing in New York, and 16 closing in Illinois and Pennsylvania.
The 291 locations for closure were comprised of 235 Claire’s locations and 56 Icing locations. There were around 830 stores listed in the filing as not closing.
Claire’s has more than 2,750 stores in 17 countries across North America and Europe, as well as 190 Icing stores in North America.
Before Ames Watson’s takeover was announced, Claire’s had said it may need to close more than 1,100 stores if it did not find a buyer, USA Today reported.
Chapter 11 refers to a court-supervised “reorganization” process that allows a financially distressed company to continue operating while restructuring its debts.
Under the proceedings, the company usually remains “in possession” and must propose a reorganization plan. Creditors whose rights are affected can then vote on the plan, and the court must determine that the legal requirements are met to confirm it. The company is then able to continue operating, but can only borrow more money with the court’s approval.
What People Are Saying
Claire’s CEO Chris Cramer, in a news release: “As we continue through our restructuring proceedings, our team has worked tirelessly to explore every option for preserving the value of the Claire’s business and brand. We are glad to reach this definitive agreement to sell a portion of our North America operations to Ames Watson and maximize the value of our company for all our stakeholders. I would again like to extend my gratitude to every Claire’s employee who has continued to show up for our customers during this challenging time for our business.”
Lawrence Berger, Co-Founder of Ames Watson, in a news release: “We are pleased to have the opportunity to partner with Claire’s and support the next chapter for this iconic brand. Claire’s has built a powerful emotional connection with generations of consumers through its focus on self-expression, creativity, and accessible fashion.
“We are committed to investing in its future by preserving a significant retail footprint across North America, working closely with the Claire’s team to ensure a seamless transition and creating a renewed path to growth based on our deep experience working with consumer brands.”
What Happens Next
It is unclear when the stores will be closed as specific closure dates were not disclosed in the filing.
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