What went wrong at tween jewelry staple Claire’s
Tween mall staple Claire’s filed for bankruptcy protection for the second time in seven years this week, capping a fraught few years of dealing with mounting debt and shifting consumer patterns.
Claire’s, which filed for bankruptcy in 2018, said it was now voluntarily beginning Chapter 11 proceedings in the U.S. in Delaware. Its Canadian subsidiary commenced a similar proceeding under the Companies’ Creditors Arrangement Act. Claire’s locations outside of North America are not included in the Chapter 11 or CCAA proceedings.
Known for its ear-piercing service, Claire’s has about $500 million in debt due in December 2026. It also has between $1 billion and $10 billion in assets and liabilities, according to court filings. In a press release and a subsequent bankruptcy docket, Claire’s CEO Chris Cramer said the decision to declare bankruptcy was a “difficult, but necessary one,” due to headwinds ranging from increased competition and higher interest rates to a cultural shift away from brick-and-mortar retail.
After declaring bankruptcy its first time around, Claire’s embarked on numerous turnaround efforts, including expanding its e-commerce business, boosting its social media presence, joining Roblox, and setting up shop-in-shops with retailers like Macy’s and Kohl’s. But, even as Claire’s attempted to freshen up its image, much of its core business remained in malls. As many shoppers are buying items online, it proved difficult for Claire’s to build a mall-based business strong enough to wipe out its debt load, sources say.
Hana Ben-Shabat, founder of the research and advisory firm Gen Z Planet, believes that Claire’s clearly “recognized the need to evolve” when it came to young audiences. “Claire’s understood that Gen Z and Gen Alpha are digital natives, … and they understood the importance of content and influencer partnerships, and put efforts into building these relationships and experiences,” she said.
“[But] tactics are not strategy,” Ben-Shabat added. “Claire’s introduced some great marketing initiatives, but they were not part of an overarching strategy to revive the brand. The product, pricing and in-store experience should have evolved at the same time and reflected the values of Gen Alpha and Gen Z.”
Claire’s, which is based in Illinois, operates more than 2,750 Claire’s stories in 17 countries, as well as 190 Icing stores in North America, according to its website. Claire’s is keeping its stores in North America open for now, although Cramer, the CEO, said the company plans to “exit approximately 700 store locations” and “pursue a value-maximizing transaction for the remaining approximately 800 stores.”
Cramer added that Claire’s will start offering “store closing” and clearance sales in the coming weeks. Claire’s also plans to exit its retail partners such as Walgreens, Walmart and CVS, after finding that segment of its business “did not yield the expected returns,” Cramer said.
Financial woes
Claire’s — once popular in the 1990s and 2000s — declared bankruptcy seven years ago with the hopes of shedding $1.9 billion in debt. It then received $575 million in new capital, and amid this new lifeline, vowed to become a “healthier, more profitable company.”
By 2021, Claire’s had grown its revenue and made inroads with younger consumers. But, as competitors flooded the market, tariffs stacked up and consumers pulled back on discretionary spending, Claire’s couldn’t make it all work. On Wednesday, Cramer acknowledged that, “while Claire’s took many steps over the last few years to address … challenges, it was not enough to overcome the obstacles.”
Claire’s has struggled financially over the last 12 months. The company has an outstanding loan of $496 million due in late 2026, but earlier this year, it chose to defer debt interest payments, per Bloomberg. Then, in June and July, it stopped paying rent on some stores. Rumors of an impending bankruptcy began to swirl earlier this summer.
Data from Creditsafe provided to Modern Retail also reveals Claire’s has had troubles with paying bills on time. Creditsafe found that Claire’s portion of outstanding bills at least 91 days past their due date jumped from 3.55% in November 2024 to 6.74% in December 2024 and 10.11% in January 2025. In May 2025 and June 2025, more than half of Claire’s outstanding bills were between one and 30 days late.
Sarah Foss, head of legal at restructuring analytics firm Debtwire, told Modern Retail that Claire’s bankruptcy filing seems “fairly typical” of those of other brick-and-mortar, mall-based retailers. In cases where a company files for bankruptcy twice, Foss said, “what we’ve seen in the last few years is that, after the second filing, the company just ends up liquidating, with some online presence remaining.” Forever 21, for instance, filed for bankruptcy for the second time in six years in May and won court approval to liquidate the following month.
Regarding Claire’s, “I would be very surprised if they found somebody to actually buy all 800 of these stores or even a large chunk of them,” Foss said.
An attempted turnaround
Claire’s has tried to rightsize its business for some time. After declaring bankruptcy the first time, Claire’s stepped up its marketing efforts to try and stay relevant with young shoppers. It debuted its first-ever loyalty program, rolled out a buy-online, pick-up in-store service and expanded its partnership with Walmart. It also launched “ShimmerVille”, a virtual world on Roblox; created a subscription box service; started working with Gen-Alpha ambassadors; launched a content studio and rebranded its piercing studio.
Still, a lot of these efforts were one-off endeavors, Ben-Shabat pointed out. They created new sources of revenue, but they didn’t change the core of Claire’s offering. Claire’s still “failed to overhaul the in-store experience and adapt fully to e-commerce,” Ben-Shabat said. “And they were slow to respond to emerging competition.”
Further complicating matters is that Claire’s caters to teens and tweens, a demographic that is “notoriously fickle and heavily influenced by the trends they are seeing online,” Foss said. And young consumers’ spending power is growing, especially as they start their first jobs and start earning their own money. Claire’s was aware of the pull of Gen Alpha and Gen Z; in 2024, Claire’s then-chief marketing officer, Kristin Patrick, told Modern Retail, “If you think that these kids are not influencing buying habits and parental decision-making, have another look.”
Even as Claire’s invested in channels attractive to young audiences, like gaming, its problems began to pile up. The company hit pause on plans for an IPO in 2023, citing unfavorable public equity market conditions. In the last couple years, it witnessed the rise of marketplaces like Shein and Temu, as well as ear-piercing startups like Rowan and Studs. And, under Donald Trump’s second term, Claire’s grappled with new, sky-high tariffs when importing products from overseas, particularly from China.
Not too long ago, Claire’s was publicly optimistic about its future. Speaking to Modern Retail in 2022, Claire’s then-CEO, Ryan Vero, said the company was looking to become a “a global brand powerhouse” by “maintaining a strong fleet in the strong malls” and “innovating and bringing new products to market.”
“As consumers within markets shift from shopping in one retail node to another retail node, we have to be there with that consumer,” Vero said.