Building a brand around being trendy has one key problem.
It’s fairly impossible to stay trendy forever. A brand like The Gap has come in and out of relevancy, but at most periods in its history, it has had a core audience.
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Without that core audience, a retail brand built on being trendy invariably has high highs and very dangerous lows.
By their nature, trends end. We are not wearing bell bottoms anymore, although history tells us they will probably come back.
Kids no longer play with pogs, and Beanie Babies have gone from being collectibles back to being stuffed animals.
As a business, one of the hardest groups to reach is younger teenagers. Some retail chains have captured that group, but it tends to be fleeting.
Younger people move on from things faster than adults. One minute everyone has rubber bands as bracelets, and the next, anyone seen wearing that trend is horribly out of fashion.
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Claire’s, a once-popular mall retailer that sells mostly to teenagers, has been struggling for years. The chain filed for chapter 11 bankruptcy in 2018 and, while it survived, it has never really recaptured its mojo.
Now, the struggling retailer faces all sorts of new competition, and it’s no longer on trend.
Those are problems its current owner appears to not have the patience to solve.
Image source: Getty Images
Claire’s faces a lot of problems
When Claire's survived Chapter 11 bankruptcy in 2018, it emerged under the ownership of Elliott Management and Monarch Alternative Capital. It's no longer a public company, so it's hard to know exactly where the chain sits financially, but some new media reports suggests that the retail brand has continued to struggle.
The retailer, which mostly sells accessories aimed at younger teen girls, seems to struggle to define its brand, even on its own website.
“Claire’s is a global brand powerhouse for self-expression, creating exclusive, curated and fun fashionable jewelry and accessories, and offering world-leading piercing services. The company operates under two brand names: Claire’s and ICING,” it posted.
That's accurate, but does not tell the full story. Claire's sells disposable items meant to satisfy impulse shopping for teenagers. The chain has suffered as rivals like Shein, Temu, and even Amazon have entered that space.
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The chain's owner has been shopping Claire's partially due to concerns over President Donald Trump's tariffs impacting pricing and margins. The company also has a $500 million loan coming due in December 2026.
If a buyer cannot be found, the owners could sell the global brand in pieces in order to pay off its debts.
Claire's faces a possible shutdown
Retail expert Neil Saunders remains hopeful that a buyer can be found and that a closure won't be necessary, but he does see changes coming.
“I am sure there are buyers out there; the question is what price they are willing to offer. With high debt levels and imminent loan payments, Claire’s needs a buyer that is able to inject cash or sustain losses. That necessarily reduces the value of the business. It may also require the business to be sold off piecemeal,” he posted on RetailWire.
Craig Sundstrom seems slightly more optimistic.
“Gee, you’re already bankrupt, and you get acquired by a well-known activist investor...who could have possibly seen this coming? That having been said, I believe they’ll find a buyer…it seems like every company, however hopeless, does. It may be someone with more dollars than smarts,” he added.
The company operates more than 2,750 Claire’s stores in 17 countries throughout North America and Europe and 190 ICING stores in North America. It also sells Claire’s products in thousands of concessions locations in North America and Europe, and has more than 300 franchised Claire’s stores, located primarily in the Middle East and South Africa.
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Mohamed Amer, a retail consultant, does believe a buyer will be found, but he's not confident that the brand will survive.
“Debt, tariffs, competition: Claire’s perfect storm. Private equity loaded Claire’s with debt, tariffs are squeezing margins, and consumer spending is shifting – but the underlying brand and distribution assets could be valuable to someone with a different vision and a cleaner balance sheet. The question isn’t whether Claire’s current model works (it doesn’t), but whether someone can reimagine what Claire’s could become,” he posted.
