Claire’s Files for Second Bankruptcy as Tween Jewelry Retailer Struggles

Financial Struggles and Strategic Shifts at Claire’s

Claire’s, a well-known U.S. retailer, has once again filed for Chapter 11 bankruptcy protection, marking its second such filing in seven years. This comes amid growing uncertainty about the impact of President Donald Trump’s tariff policies on its global supply chain. The company is now considering closing approximately half of its U.S. stores, but it has also warned that it might shut down all physical locations if it fails to find a buyer for its business operations.

Headquartered in the Chicago suburbs, Claire’s listed liabilities and assets of $1 billion to $10 billion each in its Chapter 11 petition. This includes around $690.8 million in long-term debt. The brand, once a staple in malls across the country, is now facing rising import costs and a challenging consumer spending environment. Traditional brick-and-mortar stores have been losing ground to e-commerce giants like Amazon.com Inc.

According to the bankruptcy filing, the past few years have been particularly tough for Claire’s. Factors such as reduced foot traffic in stores, higher interest rates, inflation, tariffs, increased competition from retailers offering deep discounts, and a mismatch between inventory and customer demand have all contributed to its struggles.

In 2018, Claire’s was taken over by creditors including Elliott Management Corp. and Monarch Alternative Capital during its first bankruptcy. Since then, the company has been working with financial advisers such as Houlihan Lokey Inc. and Alvarez & Marsal to stabilize its finances. Recent reports indicated that potential pressure from tariffs raised concerns about Claire’s ability to meet a nearly $500 million loan due in December 2026, given its heavy reliance on China for merchandise.

To conserve cash, Claire’s deferred interest payments on its debt in May. It also skipped rent payments on some stores in June and July. These moves reflect the company's ongoing efforts to manage its financial obligations.

Claire’s North American stores sourced approximately 70% of their inventory from international suppliers between November and April. This included goods from mainland China, as well as Vietnam, Thailand, Cambodia, Bangladesh, Taiwan, and India—countries significantly affected by Trump’s tariffs. The impact of these tariffs has added to the company’s challenges.

The company recently initiated a process to sell its stores, aiming to complete the sale by September 7. It has adopted a dual-track marketing strategy to attract bids for either all or part of its business operations as a going concern or for a full chain liquidation. Bids could be submitted on a fee-for-service or equity basis.

Currently, Claire’s operates 2,750 stores across 17 countries, along with 190 Icing stores in North America. At the time of its first bankruptcy filing, the company had more than 4,500 stores.

This case, titled Claire’s Holdings LLC, is being handled under the U.S. Bankruptcy Court for the District of Delaware, with the case number 25-11454.