The Claire costume jewelry group was placed on Wednesday under the protection of the American Banking Law, known as Chapter 11, its US activities and several of its subsidiaries operating stores under the Claire’s brand and the formation of ice. He clarified in a press release that a procedure in this regard would also begin in Canada, without giving precision in the calendar. The stores will remain open and employees will continue to be paid, he said.
His French subsidiary has already put in bankruptcy in July, said the lawyer of staff representatives to the AFP.
The decision to initiate the bankruptcy procedure in the United States “is difficult but necessary,” said Chris Cramer, Chief of Claire’s since June 2024, cited in a statement. “The increase in competition, consumer spending trends and the continuous distance of the street trade, associated with our current debt obligations and macroeconomic factors, require this measure,” he continued.
“We continue to carry out active discussions with possible strategic and financial partners,” he said, evoking the determination of managers to carry out a “review of strategic alternatives.”
“Reinventing yourself will be difficult”
For Neil Saunders, director of Globaldata, this bankruptcy “is not really a surprise. The chain is overwhelmed by a cocktail of problems, both internal and external, which make their profitability impossible.” “Reinventing yourself will be difficult in the current environment,” he said. The new tasks of US customs seem to be the fall of too much, that “Claire’s cannot effectively handle,” he adds, also mentioning the competition of new players aimed at their young traditional clients, such as Lovisa, or Internet trade with Amazon at the top of the Gondo.
This is the second time that Claire’s has been under the protection of Chapter 11. In 2018, she had already used this device to reduce a colossal debt by 2.1 billion dollars. Created in 1961, Claire had been bought in 2007 by the investment company Apollo Global Management.
According to dozens of documents presented on Wednesday with a bankruptcy court of the state of Delaware, the Elliott Management investment company is now its largest shareholder with a cumulative participation of at least 39.61%. In these hundreds of pages, specify in particular the use of around 7,000 people in the United States, including around 2,000 full -time and have a network of 1,350 stores. And its debt is between one and ten billion dollars, including more than 600 million defeated in 2026.
According to Claire’s website, the group operates in a total of more than 2,750 stores in its name in seventeen countries in North America and Europe, as well as 190 ice stores in North America. It also has more than 300 franchise stores in the Middle East and South Africa and sells its products in thousands of concessions worldwide.
Judicial Administration in France
The latest results available on site focused on fiscal fiscal year 2021, then they were not written in preliminary data: the group provided net sales of $ 1.39 billion and an operational gain with comparable data between 273 and 277 million. Requested by AFP on the most recent data, the group has not been able to provide it at this stage.
In France, the Paris Economic Activity Court opened a judicial administration procedure on July 24, with an observation period of six months, according to the lawyer interviewed by AFP a few days later. At the end of this observation period, the Court will decide whether a plan must be pronounced, with a possible buyer, or if a liquidation, synonym for cessation of activity must be pronounced.
Source: BFM TV
