Claire’s files for bankruptcy again amid mounting debt

Tween-focused retailer Claire’s has filed for bankruptcy protection for the second time in seven years, aiming to restructure its business and avoid liquidation. The company, a longtime fixture in American malls known for its ear piercing services and affordable accessories, is currently saddled with approximately $500 million in debt and facing rising pressure from modern competitors and shifting consumer habits.

A Difficult But Necessary Move

“This decision is difficult, but a necessary one,” Claire’s CEO Chris Cramer said in a statement. He cited increased competition, declining in-store shopping, and heavy debt obligations as key reasons for the move. The company is in talks with both strategic and financial partners and is actively reviewing potential alternatives, including the possibility of a sale.

Despite the bankruptcy filing, Claire’s says its stores will remain open as it works to monetize its assets and explore its options. In court documents, the company listed both its assets and liabilities between $1 billion and $10 billion, though further financial details are expected to emerge in future filings.

Echoes of 2018

This is not Claire’s first time navigating financial distress. In 2018, the retailer filed for bankruptcy due to similar challenges — a steep debt load and declining mall traffic. That restructuring allowed Claire’s to eliminate $1.9 billion in debt and secure $575 million in new capital, enabling it to continue operating stores. At the time, control of the company passed to creditors including Elliott Management and Monarch Alternative Capital.

A Changing Marketplace

Since then, the retail landscape has only grown more difficult. Beyond its lingering debt, Claire’s now faces additional challenges:

• Tariffs affecting its global supply chain
• The rise of sleek, new competitors like Studs and Lovisa, which market themselves as safer, trendier alternatives for younger consumers
• Declining foot traffic at secondary malls where Claire’s stores are typically located
• Increased pressure from e-commerce giants like Amazon

“Retailers like Lovisa offer younger shoppers a more sophisticated assortment at value prices, more in line with today’s consumer preferences,” said Neil Saunders, managing director at GlobalData. “This has left Claire’s looking somewhat out of step with modern demand.”

What’s Next?

Claire’s is hoping that this second restructuring will help it stabilize operations, reduce its debt burden, and secure a buyer or investor willing to bet on the brand’s comeback. For now, the retailer continues to operate as usual — but its long-term future remains uncertain in an increasingly digital, fast-evolving retail world.