Jewellery retailer Claire’s with 2,750 stores files for second bankruptcy after tariffs
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Claire’s plans to close down around half of its US stores, but warned that it could shut all its physical locations if it cannot find a buyer for its business operations.
PHOTO: REUTERS
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NEW YORK – US retailer Claire’s filed for its second Chapter 11 bankruptcy in seven years, months after President Donald Trump’s tariff plans created uncertainty over how the retailer’s global supply chain will be affected.
Claire’s plans to close down around half of its US stores, but warned in an Aug 6 court filing that it could shut all its physical locations if it cannot find a buyer for its business operations.
It currently has 2,750 stores across 17 countries as well as 190 sister-brand Icing stores in North America, according to its website. It operated more than 4,500 stores at the time of its first bankruptcy filing.
The retailer listed liabilities and assets of US$1 billion (S$1.3 billion) to US$10 billion each in its Chapter 11 petition.
The once beloved mall staple and iconic ear-piercing locale is now confronting higher import costs for its goods alongside a rocky outlook for consumer spending due to tariffs. Traditional bricks-and-mortar stores have already lost market share to e-commerce platforms such as Amazon.com.
According to Claire’s bankruptcy filing, the past few years have been challenging, with “reduced foot traffic in stores, a rise in interest rates, inflation, tariffs, heightened competition from comparable retailers offering substantial discounts, and a disparity between inventory and customer demand”.
The accessory and nail polish provider was taken over by creditors, including Elliott Management and Monarch Alternative Capital, in its first bankruptcy in 2018.
Potential pressure from tariffs raised questions on whether Claire’s could address a nearly US$500 million loan due in December 2026, given its heavy reliance on China for merchandise.
In May, Claire’s chose to defer interest payments on its debt to conserve cash.
The company elected to skip rent payments on some stores in June and July, Bloomberg previously reported.
Claire’s North American stores purchased approximately 70 per cent of its inventory from suppliers outside the United States between November and April, largely in mainland China, as well as in Vietnam, Thailand, Cambodia, Bangladesh, Taiwan and India – some of the markets hardest hit by Mr Trump’s tariffs. BLOOMBERG
