Mall Staple Claire’s U.K. Follows U.S. Parent Into Administration

Claire’s has filed for bankruptcy for the second time in seven years.(AP Photo/Seth Wenig, File)

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For many the location of their first ear piercing, or journey into picking up accessories for themselves or BFFs, Claire’s could disappear on both sides of the Pond.

The U.K. and Ireland operation of accessories retailer Claire’s has followed its U.S. parent and collapsed into administration, putting more than 2,150 jobs at risk, after it failed to find a suitable buyer.

The move comes just days after the group’s U.S. operations filed for Chapter 11 bankruptcy in a Delaware court earlier this month, blaming increased competition, shifting consumer spending habits, the ongoing move away from bricks-and-mortar retail and debt obligations for its travails.

It was the second time in seven years that the chain has filed for bankruptcy. It said within the filing that the company has debts of between $1 billion and $10 billion.

Canadian affiliate operating stores (Claire’s Canada) also intends to commence proceedings in Canada under the Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice.

Claire’s retail stores in North America will continue to trade while the company “explores all strategic alternatives”, according to a statement issued by parent company Claire’s Holdings LLC and Claire’s U.S., which operates Claire’s in the U.S.

Claire’s U.K. Appoints Administrators

In Britain the retailer appointed Will Wright and Chris Pole from Interpath as joint administrators for its U.K. and European Services businesses yesterday and Claire’s, which is headquartered in Birmingham, trades from 306 stores across the U.K. and Ireland.

Interpath U.K. Chief Executive Will Wright said in the announcement: “Claire’s has long been a popular brand across the U.K., known not only for its trend-led accessories but also as the go-to destination for ear piercing. Over the coming weeks, we will endeavour to continue to operate all stores as a going concern for as long as we can, while we assess options for the company. This includes exploring the possibility of a sale which would secure a future for this well-loved brand.”

While Claire’s stores will continue to operate as usual, customers will no longer be able to buy items online or seek refunds for purchases made prior to the administration. Orders that have not been dispatched are expected to be cancelled.

The new comes after the business had been working with Interpath in recent weeks to draw up a rescue plan and sound out potential investors willing to salvage all or parts of its British operations, which posted a pre-tax loss of $5.4 million in the year to 3 February 2024. It is also facing an outstanding loan of $482 million that must be repaid in December next year.

Claire’s Hit By New Competitors

A once-ubiquitous mall brand widely known for sparkly accessories and ear-piercing kiosks, Claire’s downfall has stemmed from a perfect storm. Years of heavy borrowing left the company burdened by debt and as mall foot traffic dwindled, Claire’s struggled to pivot online, allowing upstart digital rivals like Shein, Temu and TikTok, plus Amazon, to capture spend from trend-hungry and cost conscious teens.

Adding to the financial challenges, tariffs and supply chain disruptions have pushed up costs, squeezing already thin margins. Even after rent deferrals and interest payment pauses, liquidity dried up and Claire’s story in many ways reflects the broader decline of mall-based teen culture brands which have found themselves outpaced by faster, cheaper, and more digitally savvy competitors.

Whether this latest restructuring will save the chain or mark its final chapter remains uncertain.

Claire’s, which also trades under the Icing fascia, is owned by a consortium including Elliott Management and Monarch Alternative Capital.