Claire’s Won’t Be Mass Closing Stores After All

The rite of passage ear piercing at Claire’s could still be in the future for teenagers as the retailer embraces a chance to keep its doors open.

Claire’s hit pause on liquidating hundreds of its stores after an affiliate of private equity firm Ames Watson agreed to buy the company and its intellectual property in a $140 million deal, according to Retail Dive.

The transaction is split between $104 million in cash and a $36 million seller note.

The deal to sell North American operations allows Claire’s to halt its planned store closures, which were expected to immediately impact about 700 stores. Among the stores initially on the chopping block were all Walmart shop-in-shops and Icing stores.

The possibility of liquidating the entire 1,500-store portfolio was also on the table.

The Ames Watson affiliate is acquiring at least 795 Claire’s locations in North America, which could be expanded to as many as 950, according to court documents. The firm is also expected to cure rent and wage issues across the company footprint.

“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,” Ames Watson co-founder Lawrence Berger said in a statement.

Other investments for Ames Watson include Lids, Champion, South Moon Under and Fanatics.

Claire’s filed for Chapter 11 bankruptcy this month, the second time the jewelry and accessories retailer filed for bankruptcy after a case in 2018. The bankruptcy announcement followed reports that the retailer had started skipping rent payments at several locations across the country in preparation for the filing.

Party City, Big Lots, Joann’s, The Container Store, and Rite Aid have also recently filed for Chapter 11 protection, contributing to broader retail vacancy struggles across the country.

— Holden Walter-Warner