Claire’s, the shopping mall chain that sells flashy accessories to teens and tweens, filed for Chapter 11 bankruptcy protection on Wednesday amid shrinking margins and pressure from online competitors.
It’s the second bankruptcy filing in seven years for the chain, which was once the go-to destination for ear piercing and cheap jewelry. The Hoffman Estates, Ill.-based company has 15 locations in the Los Angeles area and more than 100 in California.
In a news release Wednesday, the company said its retail locations in North America will remain open during the bankruptcy process. The company operates 2,750 stores in 17 countries as well as 190 locations in North America under its Icing label, according to its website.
“This decision is difficult, but a necessary one,” Claire’s Chief Executive Chris Cramer said in a statement. “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,” he said.
The company will continue to explore strategic alternatives and is in discussions with potential financial partners, the release said. The bankruptcy filing comes three months after the company deferred interest payments due late next year on a $480-million loan.
Claire’s estimated the total value of both its assets and liabilities to be between $1 billion and $10 billion. When the private company first filed for bankruptcy protection in 2018, it offloaded $1.9 billion in debt and emerged with $575 million in new capital.
The company’s decline aligns with the decreasing popularity of malls in recent years. Claire’s storefronts used to be a staple in shopping malls across the country, where teen girls could shop for colorful items such as hair clips, headbands and handbags. The stores were also a major destination for ear piercing services.
“Claire’s is synonymous with the shopping mall,” said Dominick Miserandino, chief executive of Retail Tech Media Nexus. “For the newer online generation, malls aren’t on their radar in the same way.”
Other mall-based chains, including Los Angeles-based Forever 21 and Foot Locker, filed for bankruptcy protection earlier this year. The crafts and fabric retailer Joann shut down its operations in February, and popular department store Macy’s is in the process of closing 150 underperforming locations.
Claire’s has been squeezed by competition from low-cost online retailers such as Shein and Temu, and has attempted to keep up with major retailers such as Amazon by expanding beyond malls through a partnership with Walmart. Today’s young shoppers do a lot of browsing online and look to social media influencers for the latest trends, rather than brick-and-mortar shops, experts said.
“The competition Claire’s is seeing, mostly online, is better able to keep up with generation Alpha,” said Ray Wimer, a professor of retail practice at Syracuse University. Generation Alpha includes those born between 2010 and 2024.
The company has also been hit by President Trump’s steep tariffs, which affect much of the merchandise that Claire’s sources from outside the United States. Cheap goods from China, Indonesia and Cambodia have become more expensive to import under the new taxes.
“Claire’s has to decide if they’re going to pass the cost of the tariffs onto consumers,” Wimer said. “Their customers probably aren’t willing to spend more.”
Claire’s was founded in 1961 as a chain of wig stores in the southern U.S. before merging with Chicago-based Claire’s Boutiques. The company eventually rebranded as Claire’s and became a symbol for kitschy fashion and girlhood by the early 2000s.
