Bargain jewelry and accessories mall retailer filed Chapter 11 bankruptcy Wednesday amid mounting debt and uncertainty around tariffs. This is the retailer’s second bankruptcy filing since 2018.
The company operates 2,750 U.S. stores, 14 of which are in Northwest Arkansas, the Fort Smith metro, and central Arkansas. Claire’s said all stores will remain open while the retailer explores strategic alternatives.
“This decision is difficult, but a necessary one,” said Claire’s CEO Chris Cramer in a statement. “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.”
Claire’s largely caters to tweens and younger adults with imported goods from China, Cambodia and Vietnam – countries hit hard with higher tariffs from President Trump’s evolving trade policy.
The company has a $496 million loan due late next year, but to preserve cash has suspended interest payments and also withheld rents for non-performing stores, Debtwire reports.
The retailer’s struggles are no surprise to retail consultant Neil Saunders, managing director of GlobalData. Saunders said the specialty retailer has struggled to manage its debt and service its day-to-day operations. He said the 64-year-old company has not kept up with competition, putting it out of step with modern demand.