Claire’s, a popular accessories retailer for tweens and teens, has entered administration in the UK and Ireland. This move puts over 300 high street stores and 2,150 jobs at risk. Despite this development, the stores are currently open for business as usual, while online orders are no longer being accepted.
The company, known for its ear piercing services, has ceased issuing refunds and will not be fulfilling any pending orders. With 278 stores in the UK and 28 in Ireland, joint administrators Will Wright and Chris Pole from Interpath have been appointed to oversee the process.
This decision follows Claire’s filing for bankruptcy in the US for the second time, with over 2,700 stores globally. Employees have been instructed to prevent bailiffs from entering stores amidst the bankruptcy proceedings. The initial bankruptcy filing in 2018 was due to the inability to repay a loan.
Recent reports indicated Claire’s was exploring options to sell or restructure its UK operations. The company’s financial struggles have been exacerbated by declining sales and increased online competition. Hilco Capital, the owner of Lakeland, had shown interest in acquiring Claire’s but has since withdrawn from negotiations.
Claire’s has been under the control of former creditors, including investment firms Elliott Management Corp and Monarch Alternative Capital LP, since its 2018 bankruptcy. CEO Chris Cramer emphasized that the current measures aim to safeguard the brand’s long-term value across all markets.
Interpath’s UK CEO, Will Wright, expressed commitment to operating the stores as a going concern to explore potential sale opportunities. The latest US bankruptcy filings revealed significant liabilities and assets, with debts owed to over 25,000 creditors. In the UK, Claire’s reported losses totaling £25 million over the past three years, with a £4.7 million loss in the year ending March 2024 and a reduction in turnover to £137 million.
Facing a $500 million loan repayment due next year, Claire’s has struggled with changing consumer habits and increased online competition. The company aims to navigate these challenges and secure a future for the beloved brand.
