Claire’s Holdings LLC and certain of its U.S. and Gibraltar-based subsidiaries, the operator of Claire’s and ICING stores across the United States, announced Wednesday that it has commenced voluntary Chapter 11 proceedings in the United States Bankruptcy Court for the District of Delaware to “maximize the value of its business.”
Its Canadian affiliate operating stores across Canada also intends to commence proceedings in Canada under the Companies’ Creditors Arrangement Act (CCAA) in the Ontario Superior Court of Justice, it said in a news release.
“These proceedings will enable Claire’s to immediately commence the monetization process for its assets to maximize value for the business, while continuing an active and comprehensive review of strategic alternatives, including discussions with potential strategic partners that began prior to the filings,” said the retailer.
“This decision is difficult, but a necessary one. 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,” said Chris Cramer, CEO of Claire’s. “We remain in active discussions with potential strategic and financial partners and are committed to completing our review of strategic alternatives.”
“I’d like to express my gratitude for our employees, who have continued to work diligently in a constantly evolving consumer landscape to deliver amazing products and experiences for our customers. We remain committed to serving our customers and partnering with our vendors and landlords in other regions during this time.”
Claire’s said its retail stores in North America will remain open and continue to serve customers while the company continues to explore all strategic alternatives.
“Through the filing of customary “first day” motions with the U.S. Court and the Canadian Court, Claire’s intends to uphold its commitments to customers, employees, and partners, including continued payment of employee wages and benefits,” it said.
“Claire’s U.S. intends to seek approval for a consensual use of cash collateral to ensure it has the liquidity necessary to support its operations.”
Additional information regarding the Chapter 11 proceedings is available at www.omniagentsolutions.com/claires. Court filings and information regarding the claims process are available at www.omniagentsolutions.com/claires, by calling the company’s claims agent, Omni Agent Solutions, toll-free at (888) 202-5971 (U.S.) or (747) 293-0183 (International) or by sending an email to ClairesInquiries@OmniAgnt.com.
Additional information regarding the company’s CCAA proceedings and related court-filed materials is available at the court-appointed monitor’s website at www.ksvadvisory.com/experience/case/claires, by calling KSV Advisory at +1 (844) 249-2665, or by emailing at claires@ksvadvisory.com.
Kirkland & Ellis LLP is serving as legal counsel to Claire’s. Houlihan Lokey is serving as investment banker, and Alvarez & Marsal is serving as restructuring advisor. Osler, Hoskin & Harcourt LLP is serving as Canadian legal counsel to Claire’s.
“Claire’s filing is unfortunate but represents the tough economic reality we find ourselves in,” said retail analyst and author Bruce Winder.
“As malls face headwinds as a result of e-commerce growth and social commerce growth particularly for younger customers, Claire’s was left behind.
“Tariff costs and consumer sentiment didn’t help either. This is their second bankruptcy filing in 7 years and I fear this could be the end for this retailer.
“As the father of two Gen-Z women, I will always have a fond recollection of shopping at Claire’s back in the 2000’s and 2010’s.”
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