Claire’s, a costume jewelry brand, declares itself bankrupt in the United States

The Claire’s costume jewelry group sees its situation darkening more. He placed, Wednesday, August 6, under the protection of the American bankruptcy law – known as “Chapter 11” – its American activities and several of its subsidiaries operating stores under the brand Claire’s and Icing. He clarified in a press release that a procedure in this sense would also be initiated in Canada, without giving precision on the calendar.

The stores will remain open and the employees will continue to be paid, notes the group whose French subsidiary has already been placed in receivership in July.

The decision to initiate bankruptcy procedure in the United States “Is difficult but necessary”explains Chris Cramer, boss of Claire’s since June 2024, quoted in a press release. “Increased competition, consumer spending trends and continuous distance from street trade, associated with our current debt obligations and macroeconomic factors, make this measure necessary”he continues.

“We continue to conduct active discussions with potential strategic and financial partners”assures Mr. Cramer, evoking the determination of managers to carry out a “Review of strategic alternatives”.

A device already used in 2018

For Neil Saunders, director at Globaldata, this bankruptcy “Is not really a surprise. The chain is overwhelmed by a cocktail of problems, both internal and external, which make its profitability impossible ”. “Reinventing yourself will be difficult in the current environment”he believes.

The new American customs duties seem to be too much, that “Claire’s is unable to manage effectively”he adds, also mentioning the competition of new players targeting its young traditional customers, such as Lovisa, or Internet trade with Amazon at the top of the gondola.

This is the second time that Claire’s has been under the protection of Chapter 11. In 2018, the group had already used this device to reduce a colossal debt by 2.1 billion dollars (1.8 billion euros). Created in 1961, Claire’s had been bought in 2007 by the Apollo Global Management investment company.

According to the dozens of documents filed Wednesday with a court of state bankruptcies of the Delaware, the investment company Elliott Management is now its largest shareholder with a cumulative participation of at least 39.61 %. In these hundreds of pages, Claire’s specifies in particular employing around 7,000 people in the United States, including around 2,000 full-time and having a network of 1,350 shops. Its debt is between one and $ 10 billion, including more than 600 million due in 2026.

In France, a six -month observation period

According to the Claire’s website, the group operates a total of more than 2,750 stores in its name in seventeen countries in North America and Europe as well as 190 ICING 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.

The latest results available on its site focused on the fiscal fiscal year 2021, it was then not audited preliminary data: the group provided for net sales of $ 1.39 billion and an operating profit with comparable data between 273 million and 277 million dollars.

In France, the Paris Economic Activities Tribunal opened on July 24 a receivership procedure, with a six-month observation period, according to the lawyer interviewed by the Agency France-Presse, a few days later. At the end of this observation period, the court will decide whether a continuation plan is possible, with a possible buyer, or if a liquidation, synonymous with cessation of activity, must be pronounced.