Struggling jewelry chain Claire's plans to offload its North American operations
Claire's, the popular retailer known for its earrings and fashion accessories for teens and young girls, has once again filed for bankruptcy in Delaware, this time with over $690 million in debt. The company has been struggling with increased competition, high rent costs, and new tariffs on imports from supplier nations such as China, Thailand, and Vietnam.
However, there is a glimmer of hope on the horizon. Ames Watson, a private holding company, has agreed to acquire the Claire's brand and up to 950 stores. The sale, worth $104 million in cash, aims to keep Claire's as a prominent retailer for the specified demographic around the world.
Ames Watson will provide noncash considerations, including taking on liabilities owed to Claire's vendors and landlords. The firm will also extend US$36 million in credit to Claire's to address some of its pre-existing debt.
Lawrence Berger, co-founder of Ames Watson, stated that the firm is committed to investing in Claire's future by preserving a significant retail footprint across North America. Ames Watson will continue to employ current retail staff at the acquired stores and is expected to take over the operations of at least 795 stores after the sale.
This sale will keep at least 795 Claire's retail locations in business. Claire's operates more than 2,300 stores across 17 countries in North America and Europe.
Claire's previously filed for bankruptcy in 2018. The new owners of the Claire's brand in North America will seek approval of the sale at a court hearing in Wilmington, Delaware, on Thursday.
Despite the halt of "going out of business sales" at stores that could be sold, Claire's continues liquidation sales at other locations. However, with Ames Watson's acquisition, there is a renewed sense of optimism for the future of Claire's and its customers.
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