Tween accessories chain Claire's to seek creditor protection in Canada
Claire’s, an accessories and jewellery chain that was once a go-to store for tweens in its heyday, is seeking creditor protection in the United States and will soon do the same in Canada.
The retailer announced in a news release on Wednesday that it has commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware.
The release added that Claire’s affiliate operating stores across Canada also intend to begin proceedings under the Companies’ Creditors Arrangement Act (CCAA) in the Ontario Superior Court of Justice.
According to the company, the process will allow Claire’s to monetize its assets and explore strategic alternatives that could keep it from going into receivership or bankruptcy.
This may be bittersweet news for millennials who got their first ear piercings as teenagers at a Claire’s, which has been a staple at malls in Canada for decades. Unfortunately, according to CEO Chris Cramer, the business just can’t compete in the digital age.
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“This decision is difficult, but a necessary one. Increased competition, consumer spending trends and the ongoing shift away from brick-and-mortar retail, in combination with our current debt obligations and macroeconomic factors, necessitate this course of action for Claire’s and its stakeholders,” he said.
Claire’s stores across the U.S. and Canada will remain open while the company goes through this process.
The retailer says it intends to continue paying employee wages and benefits.
“I’d like to express my gratitude for our employees, who have continued to work diligently in a constantly evolving consumer landscape to deliver amazing products and experiences for our customers,” added Cramer. “We remain committed to serving our customers and partnering with our vendors and landlords in other regions during this time.”
This isn’t the first time the 63-year-old company has undergone this process. It also filed for creditor protection in 2018, when it had over 4,500 stores worldwide. Claire’s currently has over 2,750 stores in 17 countries.