Claire’s on the verge of collapse with over 2,000 jobs at risk
Claire’s, the high street fashion accessories chain, is on the brink of collapse after revealing its intention to appoint administrators in the UK and Ireland in a move which would put over 2,000 jobs at risk.
The business, which has 278 stores in the UK as well as a further 28 in Ireland, filed a notice of intention to appoint administrators at the High Court on Wednesday, normally a precursor for formal insolvency.
The move comes just a week after it filed for bankruptcy in the US and entered administration in France.
Will Wright and Chris Pole from Interpath are expected to be formally appointed as joint administrators to Claire’s UK in the coming days.
The move is meant to “protect the business and its stakeholders while options for the future continue to be evaluated”, the company said in a statement.
“In the UK, taking this step will allow us to continue to trade the business while we explore the best possible path forward,” he added.
It comes just a week after the US-based fashion accessories and jewellery business filed for Chapter 11 bankruptcy in a court in Delaware.
Chris Cramer, CEO of Claire’s, said at the time that the course of action was needed due to “increased competition, consumer spending trends and the ongoing shift away from brick-and-mortar retail, [as well as] debt obligations and macroeconomic factors.”
The company’s French subsidiary entered judicial recovery at the end of July.
The company has faced bankruptcy before – in 2018, Elliot Management and Monarch Alternative Capital gained control of its stores as former creditors.
A significant turnaround has been halted by rivalry from companies such as Amazon, which have capitalised on the cheaper products from China, leading to a slowing in-store consumption and cost pressures.
Claire’s the latest high street casualty
Claire’s runs 2,750 stores across 17 countries and employs 2,150 people in the UK and Ireland.
Last month, Bloomberg reported that Claire’s had instigated a search for a future buyer, but it has reportedly struggled to land a bid.
Claire’s is not the only mid-market retailer to be squeezed by competition, with River Island narrowly avoiding administration after the UK’s High Court approved its restructuring package last week.
Britain’s high streets have been facing huge pressure from the rise of online shopping and ever-ballooning costs.
Business rates, increasing taxes and low footfall have all heaped pressure on stores, with 360,000 jobs lost in retail in the last decade.
“Younger people are just less interested in bricks and mortar, going into a shop and trying things on, because [online shopping] is so handy,” Michelle Quinn, partner at Grosvenor Law, said.
“And if landlords keep pricing… high rates, it’s just not that conducive to a thriving High Street, unfortunately,” Quinn added.