Claires files for bankruptcy as retail pressures mount

Claire’s, the retailer renowned for its jewellery and ear piercing kiosks, has entered bankruptcy proceedings in the United States for the second time within seven years. The move comes as the company grapples with diminishing consumer demand on the high street and significant shifts towards online shopping.

With over 2,700 stores across 17 countries—including the UK and France—Claire’s has revealed in court filings in Delaware that its debts currently range from $1 billion to $10 billion. Growing uncertainty over US trade policy, particularly regarding tariffs, has raised doubts about the group’s ability to service a loan worth nearly $500 million, which is set for repayment by December 2026.

Chris Cramer, chief executive of Claire’s, described the decision as a necessary response to growing competitive pressures and evolving consumer spending habits, in addition to outstanding debt obligations and broader economic conditions. Despite the bankruptcy process, Claire’s stores across the US and Canada will remain operational as the company continues to explore strategic alternatives with both financial and strategic partners.

In the UK, where Claire’s maintains at least 280 outlets, advisers from Interpath have been appointed to consider future options. These may include a sale or insolvency, either of which would likely prompt widespread closures. According to recent filings, UK sales declined by almost 1 percent in the year to February 2024, standing at £136 million, while the company posted a pre-tax loss of £4 million. The UK business employs more than 1,600 staff.

Elsewhere in Europe, the French arm of Claire’s, which oversees 239 stores, was placed in receivership last month. The wider retail sector has seen similar difficulties: shopping mall stalwarts and fast-fashion retailers are facing challenges as customers tighten purse strings and migrate online. Ear piercing—once a pillar of Claire’s unique selling proposition—now faces competition from high street outlets such as Superdrug in the UK.

Other major names on the high street are likewise under pressure. US-based Forever 21, for example, filed for bankruptcy this March, announcing plans to wind down its US operations. Department store chain Macy’s is also closing a substantial number of outlets through 2025, while notable retailers like 99 Cents Only and Rite Aid have turned to bankruptcy protection to restructure.

Claire’s underwent a previous bankruptcy process in 2018, restructuring $1.9 billion in debts built up after its 2007 private equity acquisition. Since then, the company has been controlled by former creditors Elliott Management and Monarch Alternative Capital.