For bankrupt Claire’s, it’s either find a buyer or shut down.
Court documents indicate that the accessories chain, which also sells items such as socks and slippers, is following a dual-track process that includes hiring Hilco Merchant Resources as the liquidation firm to close all stores. Claires operates 1,260 standalone locations across North America plus 210 shop-in-shops inside select Walmart stores. There’s also an additional 850 company-operated stores overseas. The overseas operations are not part of the Chapter 11 case that was filed on Wednesday in a Delaware bankruptcy court. The company said that its Canadian affiliates also plan to commence proceedings in Canada in the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act. There were rumblings last month that a Chapter 11 filing was a possibility. But there were signs of cash-flow pressures earlier this year.
The agreement between Claire’s and Hilco allows for the suspension of the liquidation sale should the retailer find a going-concern buyer. But even if it does, at least 700 mall locations are on the chopping block and are expected to be shuttered by early September once store closing sales are completed. If no buyer is found, then all Claire’s are expected to go dark by the end of October.
That doesn’t mean that the Claire’s name will go away. The intellectual property assets for U.S. operations could be sold as part of a bankruptcy court auction. And a buyer could acquire the assets with an eye toward resurrecting the name online.
Chris Cramer, CEO, chief operating officer and CFO, filed a document called a declaratory statement with the Delaware bankruptcy court noting that the closure of 700 unprofitable store locations are part of a go-forward business plan centered on a smaller footprint. The company began marketing its go-forward plan this past June, with outside advisors reaching out to over 150 prospective strategic and financial buyers. Confidentiality agreements were signed with 60 parties. Cramer said the company is in talks with certain parties in connection with a potential stalking-horse bid.
Cramer said the company sources merchandise from 250 vendors, with about 70 percent located outside of the U.S. Included in the overseas vendor list are 56 percent that are based in mainland China, 8 percent from Vietnam and 23 percent from Thailand. He said the heavy reliance on foreign suppliers has significantly impacted the company following the implementation of reciprocal tariffs this past April. The company engaged in tariff-mitigation initiatives, including testing price increases. Cramer said the company knew that raising prices could contribute to a “declining customer base and declining same-store sales,” which is what happened in 2021 and 2022.
The company’s Chapter 11 petition listed total assets and liabilities each at between $1 billion to $10 billion.
The core Claire’s doors target girls between ages 3 and 18, while the 120 Icing branded stores in North America caters to the fashion-conscious young woman between ages 18 and 35.
Ragini Bhalla, Creditsafe’s head of brand and spokesperson, said Claire’s “faces fierce competition from ultra-low cost online retailers like Shein and Temu.” She noted that the company’s mounting debt and rising tariffs aren’t its only problems. The company’s payment history show signs of cash-flow strain, and its growing late payments have contributed to the aging of invoices, she said. According to data from the credit research firm, Claire’s outstanding bills 91+ days past due rose from 3.6 percent in November 2024 to 6.7 percent in December 2024, and then rose even higher to 10.1 percent in January 2025.
“And when we looked at the company’s aging invoices for the last few months, we could see that upwards of 50 percent to 67 percent of its outstanding bills were already in the 1-30 days past due category in May and June 2025,” Bhalia said.
Wednesday’s filing is the second bankruptcy for Claire’s. It is owned by Elliott Management Corp. and Monarch Alternative Capital, who were part of the creditor group that took control of the retailer after it filed its first Chapter 11 petition in March 2018.
