Popular Retailer Files For Bankruptcy, Begins Liquidation

Popular mall retailer Claire's has reportedly begun liquidating stores after filing for bankruptcy for the second time in a seven-year span, CNBC reports.

The store, which specializes in tween accessories, had previously filed for bankruptcy protection in 2018, at which point it was taken over by creditors Elliott Management Corporation and Monarch Alternative Capital. The creditors eliminated $1.9 billion of debt and the store saw some reported sales momentum in 2021, however, still struggled to modernize in the e-commerce world with failed efforts to expand retail partnerships with other companies such as Walgreens and Walmart, a loyalty program and investments in influencer-based content.

“Claire’s was not immune from the continued trend away from brick and mortar and more recent macroeconomic challenges, including higher interest rates, labor costs and, most recently, tariffs,” the company said in a bankruptcy declaration filed last Wednesday (August 6) via CNBC. “While Claire’s took many steps over the last few years to address these and other challenges, it was not enough to overcome the obstacles.”

Claire's is among several notable major retailers to have filed for bankruptcy within the last decade including Party City, Z Gallerie, Forever 21 and Rite Aid.

“What we’re typically seeing in the last year are these repeat filers is that they are just liquidating and closing down their stores, maybe with some online presence continuing,” said Sarah Foss, global head of legal at Debtwire, via CNBC.

Claire's said it had contacted more than 150 potential buyers in the months leading up to its bankruptcy filing and received multiple letters of intent amid continued negotiations, with a deadline for a possible sale set for August 31.