Agenda-setting intelligence, analysis and advice for the global fashion community.
Claire’s Stores Inc. is considering a potential bankruptcy for its US operations, according to people with knowledge of the matter, as the former fixture of shopping malls across the country struggles with weak demand, higher import costs and a heavy debt burden.
Houlihan Lokey Inc. has been working with the retailer to shore up its finances while also exploring a potential sale of all or part of its operations, which includes store networks in North America and Europe, Bloomberg previously reported. The teen accessory chain has received interest for its European assets, some of the people said, asking not to be identified because the information is confidential.
No final decision on the company’s reorganisation has been made, the people added.
Claire’s has struggled to turn around its fortunes following a 2018 bankruptcy in which Apollo Global Management handed over the keys to creditors including Elliott Management Corp. and Monarch Alternative Capital. In recent months higher import costs tied to US President Donald Trump’s tariff policies as well as weakening consumer spending have weighed on its business, the people said.
ADVERTISEMENT
Representatives for Claire’s, Elliott and Monarch didn’t respond to requests seeking comment, while a spokesperson for Houlihan declined to comment.
Claire’s, a brand that once dominated the mall landscape, has a roughly $477 million term loan due in December 2026. The firm recently chose to defer interest payments on its debt as a way to conserve cash. The debt is quoted at around 39 cents on the dollar, according to Bloomberg pricing.
The retailer is also working with Alvarez & Marsal for operational assistance.
By Sabah Meddings, Reshmi Basu, and Jamie Nimmo
