Claire’s has declared bankruptcy in the US for the second time in seven years.
The tween accessories retailer, which also has its own brand beauty line C by Claire’s, has commenced voluntary Chapter 11 proceedings in the United States Bankruptcy Court for the District of Delaware to “maximise the value of its business”.
It said within the filing the company has debts of between US$1bn and $10bn.
Canadian affiliate operating stores (Claire's Canada) also intends to commence proceedings in Canada under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice.
"This decision is difficult, but a necessary one,” said Chris Cramer, CEO of Claire's.
“Increased competition, consumer spending trends and the ongoing shift away from bricks-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."
Claire's retail stores in North America will continue to trade while the company “explores all strategic alternatives”, according to a statement issued by parent company Claire's Holdings LLC and Claire's U.S., which operates Claire's in the US.
Through the filing of customary "first day" motions with the US Court and the Canadian Court, Claire's intends to uphold its commitments to customers, employees and partners, including continued payment of employee wages and benefits.
Claire's U.S. intends to seek approval for a consensual use of cash collateral to ensure it has the liquidity necessary to support its operations, it added in the company statement.
Earlier this year, Claire's had deferred payments on debt interest as a way to conserve cash, according to a report by Bloomberg.
In the UK, Claire’s has 280 outlets and recently appointed advisers from Interpath to consider options for its future, which could include a sale or insolvency process.
Claire's first filed for Chapter 11 bankruptcy in the US in 2018, with plans to shed a majority of its debt.