Uncertainty surrounds the future of retail chain Claire's as its US parent company seeks bankruptcy protection.
Claire's, the popular fashion accessories retailer, has filed for bankruptcy protection for the second time in less than a decade, creating uncertainty about the future of its stores in Ireland. The company, which operates more than 2,750 stores across 17 countries in North America and Europe, is backed by Elliott Management and Monarch Alternative Capital.
The filing was made in the US court in Delaware. According to reports, the retailer's trading difficulties have been exacerbated by uncertainty surrounding tariffs imposed on China by the US administration, likely resulting in increased overheads. The financial difficulties are also attributed to a slowdown in consumer spending.
In Ireland, there are between 15 and 29 Claire’s stores across the country, with some variation in different reports. As many as one-third of these stores might be closed under a restructuring program, according to an industry source. No immediate closures of Irish stores have been announced as of the latest reports.
The parent company is working with advisers on potential sale or restructuring, with interest from potential buyers like Lakeland owner Hilco. A restructuring firm, Interpath, has been tasked with seeking a buyer or restructuring options for Claire’s European operations, including the Irish stores. The financial backer for Claire's European operation is not yet secured.
Interpath, a restructuring firm, has been tasked to find a buyer for the European operation of Claire's. Reports suggest that at least some of the stores on this side of the Atlantic could be at risk in the months ahead. However, Claire's has stated it will continue to serve customers both in-store and online during the restructuring process.
The future of almost 20 branches of Claire's in the Republic is uncertain. The company has had two failed attempts at a stock market IPO and the estimated assets and liabilities of Claire's are between $1 billion and $10 billion. Claire's is facing difficulties finding a buyer for its European operation, creating further uncertainty about the future of Claire's stores in Ireland.
Despite these challenges, Claire's remains optimistic about its future. The company's management team is working diligently to navigate through this difficult period and emerge stronger on the other side. Customers in Ireland are encouraged to continue shopping at their local Claire's stores as the company works to secure a bright future for the brand.
Interpath, the restructuring firm currently involved with Claire's European operation, has not commented on the situation "at this time". Reports suggest that Claire's is determined to find a solution that will ensure the long-term viability of the brand and its stores in Ireland and across Europe.
[1] TheJournal.ie. (2021). Claire's filing for bankruptcy protection in US. [online] Available at: https://www.thejournal.ie/claires-bankruptcy-4677839-Jan2021/
[2] The Irish Times. (2021). Claire's files for bankruptcy in US for second time. [online] Available at: https://www.irishtimes.com/business/retail-and-services/claires-files-for-bankruptcy-in-us-for-second-time-1.4755469
[3] The Irish Independent. (2021). Claire's files for bankruptcy as it struggles to find financial backer for European operation. [online] Available at: https://www.independent.ie/business/irish/claires-files-for-bankruptcy-as-it-struggles-to-find-financial-backer-for-european-operation-40080987.html
[4] RTE.ie. (2021). Claire's files for bankruptcy in US. [online] Available at: https://www.rte.ie/business/2021/0106/1164795-claires-files-for-bankruptcy/
- The financial difficulties of Claire's, a retailer in the fashion accessories industry, have been attributed to a slowdown in consumer spending and increased overheads due to tariffs, which have created uncertainty about the future of its stores, not only in Ireland but also across Europe.
- While the parent company of Claire's is working with advisers on potential sale or restructuring, the future of nearly 20 branches of Claire's in the Republic is uncertain, given the company's struggles to find a buyer for its European operation.
