Claire’s Accessories stores in Midlands face uncertain future after US owner files for bankruptcy

US-based fashion accessories and jewellery business Claire’s has filed for Chapter 11 bankruptcy in a court in Delaware, according to new filings.

It is the second time the group has declared bankruptcy, after first filing for the process in 2018 after it was unable to repay a loan.

The group saw its finances improve after wiping around 1.9 billion dollars (£1.4 billion) off its balance sheet in a refinancing but has come under pressure from recent weak consumer demand and supply chain uncertainty.

It also intends to begin proceedings in Canada, the company said, and these will enable Claire's to immediately start monetising its assets to maximize value for the business, while continuing an active and comprehensive review of strategic alternatives, including discussions with potential strategic partners that began prior to the filings.

Chris Cramer, CEO of Claire's, said: "This decision is difficult, but a necessary one. 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.

"We remain in active discussions with potential strategic and financial partners and are committed to completing our review of strategic alternatives.

"I'd like to express my gratitude for our employees, who have continued to work diligently in a constantly evolving consumer landscape to deliver amazing products and experiences for our customers. We remain committed to serving our customers and partnering with our vendors and landlords in other regions during this time."

Claire’s runs 2,750 stores across 17 countries. It has around 280 stores in the UK.

The accessories brand has a raft of outlets in the West Midlands including Wolverhampton, West Bromwich, Walsall, Merry Hill, Birmingham New Street, Birmingham’s Bullring, Stafford, Hanley, Sutton Coldfield, Solihull, Resorts World Birmingham and Lichfield. It also has branches in Shropshire in Telford and Shrewsbury. 

The new bankruptcy filings showed the business reported liabilities and assets of between 1 billion dollars and 10 billion dollars. It also showed the company owed more than 25,000 creditors.

The group is owned by a group of firms, including investment giant Elliott Management, who were creditors when the retail firm first faced insolvency seven years ago.

Last month, Sky News reported that Claire’s was working with advisers from Interpath to seek a potential sale or restructuring of its UK business.

The report indicated a sale deal could result in store closures across the UK.

It also reported that Lakeland owner Hilco is among suitors considering a takeover deal for Claire’s’ UK operations.