Claire’s, once a mall destination for tweens, files for bankruptcy

Claire’s, the mall chain known for its kitschy fashion accessories for teens and tweens, filed for Chapter 11 bankruptcy Wednesday – its second in seven years – as tariffs gnaw at its margins and it continues to lose ground to online rivals.

The chain, based in Hoffman Estates, Illinois, has 2,750 locations in 17 countries and 190 stores operating under its Icing label in North America, according to its website. The company said all its North American stores will remain open while it “continues to explore all strategic alternatives.”

Claire’s has locations in the NorthTown and Spokane Valley malls.

The bankruptcy comes three months after the company deferred interest payments due December 2026 on a $480 million loan. Tim Hynes, head of Global Credit Research at Debtwire, said the move likely allowed the company to pay employees and rent.

Chief executive Chris Cramer said in a public statement that the bankruptcy emerged from “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.”

Claire’s estimated the total value of its consolidated assets to be between $1 billion and $10 billion. Its liabilities were estimated as between $1 billion and $10 billion as well.

Claire’s, which for decades thrived as a mall destination, has struggled to hold on to its target customer, analysts said. Generation Alpha – the cohort born between 2010 and 2024 – is spending less time in the mall and hasn’t taken to the store like earlier generations. Instead, they’re shopping on their phones and are interested in more sophisticated jewelry and accessories.

The company also faces notable headwinds with tariffs. It sources the majority of its products – including earrings, headbands and key chains – from China, Cambodia and Indonesia, Ragini Bhalla, the head of brand at Creditsafe, wrote in a media note. The company has also fallen behind on paying its invoices, Creditsafe data shows.

“These patterns once again reveal that the retailer has been struggling to handle its financial obligations and delaying paying more of its outstanding bills,” Bhalla said.

The company said that despite the bankruptcy filing, it “intends to uphold its commitments to customers, employees, and partners, including continued payment of employee wages and benefits.”

This is the second time Claire’s has filed for Chapter 11 protection. In 2018, the company off-loaded $1.9 billion in debt and emerged seven months later with a creditor group – including Elliott Capital management and Monarch Alternative Capital – at the helm and $575 million in new capital.

“In my experience, retailers that go into bankruptcy and then reorganize … are not successful,” said Hynes, pointing to Party City, the Container Store and Joann.

Claire’s is the latest mall-based retailer to file for bankruptcy, following Foot Locker and Forever 21 in March. (Dick’s Sporting Goods announced in May it’s buying Foot Locker for $2.4 billion.)

“Some mall brands struggle to evolve,” said Katie Thomas, who runs Kearney Consumer Institute.

Competition from all sides

Claire’s was founded in 1961 as a chain of wig stores in the southern United States known as Fashion Tress Industries. In 1973, the company merged with Claire’s Boutiques, an accessories chain based in Chicago, and eventually rebranded to Claire’s.

By the 1990s and 2000s, the stores were synonymous with girlhood, enticing tweens and their moms into the lavender-hued stores for their first ear piercing and an obligatory stop during a mall trip with friends. It was a haven for millennial nostalgia paraphernalia, like butterfly clips, Von Dutch trucker hats, scrunchies, and “Mrs. Kutcher” handbags.

In recent years, the chain tried diversifying outside the mall. In 2018 it partnered with Walmart on in-store Claire’s displays and with Macy’s in 2022 for shop-in-shops at 21 locations. It also tried to boost its e-commerce business but failed to keep up with the growing popularity of “ultra-low-cost online retailers” like Shein and Temu, Bhalla wrote.

Meanwhile, Amazon and the TikTok shop are growing market share with Gen Alpha consumers, who are turning to social media rather than malls to figure out what to buy, said Michael Tadesse, who teaches marketing at George Washington University.

Younger consumers are also more responsive to message-based marketing, Tadesse said.

“Beyond selling sparkles, how do you sell confidence? How do you sell kindness and identity around the first earring or shopping trip experience?” Tadesse said, adding that younger consumers want to broadcast and post about their own experiences with brands, rather than hearing it solely from marketers.

“It’s about showing them that they’re also represented. I believe this generation is very responsive to kindness and inclusivity and ethical storytelling,” he said.

Another difference: They are leaning further toward brands that make them feel grown-up, said Matt Smith, an analyst at GWI.

“They don’t want cheap makeup play kits or flimsy tracksuits. They want the high-end stuff,” Smith said. “Claire’s, with its bright colors, glitter-heavy packaging, and ‘cute’ aesthetic, may have felt stuck in preteen mode.”

The stores can feel cluttered with inventory, said Thomas, of Kearney.

“What we’re starting to see from consumers is more of a desire for curation, so less is more,” she added.

Neil Saunders, a managing director of retail analytics firm GlobalData, wrote in an analyst note that bankruptcy will allow Claire’s to “slim down, shed debt, and shutter weaker stores.” Even then, however, “reinventing will be a tall order.”