Claire’s filed for bankruptcy in Delaware on Wednesday, marking the second time the teen accessories chain has entered Chapter 11 proceedings.
In its bankruptcy filing, the jewelry retailer listed both its liabilities and assets between $1 billion to $10 billion.
Reached for comment, Claire’s referred CBS MoneyWatch to its press release.
“This decision is difficult, but a necessary one,” said Chris Cramer, CEO of Claire’s, in the company’s statement. “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.”
Claire’s stores throughout the United States will remain open as it explores “strategic alternatives,” the company said.
The company, which offers jewelry, hair accessories and ear piercings, first filed for bankruptcy in 2018 amid declining foot traffic at U.S. malls.
Retailer facing a “cocktail of problems”
Claire’s decision to file for bankruptcy a second time comes amid an increasingly challenging retail environment for the accessories chain, which had once been a staple for teen shoppers at malls across the United States. The retailer has over 2,750 stores worldwide, according to its website.
Neil Saunders, managing director of GlobalData, said in an email note that Claire’s is facing a “cocktail of problems,” including high debt and increased competition from companies like fashion jeweler Lovisa, which he said is more “attuned to what younger consumers want.”
Claire’s has also struggled to maintain its footing as its teen customers increasingly shop online, noted Sarah Foss, head of legal at Debtwire, in an email to CBS MoneyWatch.
In addition, tariffs have added further strain on the already cash-strapped retailer by pushing costs higher, according to Saunders. President Trump announced a new slate of reciprocal tariffs against U.S. trading partners, scheduled to take effect on Aug. 7.
“There is likely a place for Claire’s, but it will need to use bankruptcy to slim down, shed debt and shutter weaker stores,” said Saunders. “Reinventing will be a tall order in the present environment.”
Forever 21 and Rue21 are among the other similar retailers that have issued repeat bankruptcy filings in recent years.
