Claire’s Stores, the teen-focused fashion accessory retailer, has taken a step toward Chapter 11 bankruptcy after reportedly skipping rent payments for June and July at some leased locations.
A Bloomberg report citing sources familiar with the matter said the filing could come as soon as this week, but timing remains uncertain as the company makes its final preparations. The chain, founded in 1961, is headquartered in the Hoffman Estates suburb of Chicago.
Claire’s struggles and its impending second bankruptcy reflect a broader downturn among chains once popular in malls and big box spaces within retail strip centers that has weighed on commercial real estate. Beyond major bankruptcies like those of Party City, Big Lots, Joann, and Rite Aid — which are forcing widespread store closures and contributing to vacant retail spaces — the commercial property market also faces challenges from tariffs and trade wars, causing merchants to hesitate on expanding their physical storefronts.
To start this year, net occupancy in the retail sector decreased by about 6 million square feet, marking the weakest quarter since the onset of the pandemic, according to Cushman & Wakefield. This decline signals a retreat for retailers, with a two-year period of net expansion concluding last year as 1,300 more stores closed than opened, as reported by Coresight Research.
Claire’s has been exploring restructuring strategies, including a possible sale, amid deteriorating cash flow and a sizable debt load. Earlier this year, the company delayed interest payments in an effort to preserve cash. The retailer faces heightened financial pressure with a nearly $500 million loan maturing in December 2026 trading at just 37 cents on the dollar — down from 76 cents in June.
This would mark the retailer’s second bankruptcy in a decade. A 2018 restructuring handed ownership to investment firms Elliott Management and Monarch Alternative Capital.
Questions around U.S. tariff policy have further clouded Claire’s future. The company and its key stakeholders declined to comment on the situation.
Claire’s was once a fixture in U.S. malls selling inexpensive jewelry and accessories to a teen and tween female clientele. The firm claims it has pierced more than 100 million ears during its 64-year existence. Last year Ryan Vero stepped down as CEO and was replaced by Interim CEO Chris Cramer.
— Joel Russell
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