(NEXSTAR) — Claire’s, a retailer known for its mall-based accessory stores that attract tweens, has sought Chapter 11 bankruptcy protection once again, marking the second time in under ten years.
The company, headquartered in Illinois, revealed on Wednesday that it has started Chapter 11 proceedings in the U.S. Bankruptcy Court in Delaware to enhance the value of its operations. It’s anticipated that the Canadian division will follow suit.
“This is a tough yet necessary choice,” said Claire’s CEO, Chris Cramer, in a press statement. “Claire’s faces increasing competition, shifts in consumer spending, and the persistent decline in traditional retail spaces, coupled with our existing debt and broader economic conditions. These factors have led us to take this important step. We are actively in talks with prospective strategic and financial partners and are dedicated to exploring all strategic options available.”
For now, Claire’s stores in North America are remaining open.
Cramer also expressed gratitude towards the employees, acknowledging their hard work amidst ever-changing consumer trends to deliver remarkable products and services. “We are dedicated to our customers and collaborating with our suppliers and landlords in different regions during this period,” he added.
Claire’s, recognized for its budget-friendly jewelry, accessories, and ear piercing services, last declared bankruptcy in 2018. As noted by CNBC, the retailer encounters similar challenges now, with significant debt being a primary concern. Tariffs and heightened competition further aggravate these challenges.
At present, Claire’s holds approximately $500 million in debt and has assets and liabilities ranging from $1 billion to $10 billion. According to court records cited by CNBC, the company is considering a sale of its assets.
Other retailers that have filed for bankruptcy this year include At Home and JOANN. Fellow mall-focused stores, like Torrid, have also been forced to close dozens of stores.
