Claire’s Could Close U.S. Stores If Buyer Isn’t Found

By Rob Bates | August 07, 2025

Claire’s plans to close its U.S. stores unless the company can find a buyer for its “viable” locations, CEO Chris Cramer said in a declaration submitted Wednesday to Delaware bankruptcy court, following the company’s Chapter 11 filing.

Cramer, who also serves as chief operating officer and chief financial officer for the Hoffman Estates, Ill.–based retailer, said that a comprehensive review determined the company needs to shut approximately 700 locations in North America “that are not viable under current lease terms or otherwise underperforming.” The total includes 120 Icing jewelry stores and 210 store-in-stores at Walmart.

That leaves about 800 locations—but if Claire’s can’t find a buyer for them, they will shut too, the filing said.

“An actionable going-concern sale has not materialized for these remaining 800 stores, and unless a going-concern purchaser emerges in the immediate near-term, the debtors intend to exit all of their physical store locations,” Cramer stated.

He said that prior to the bankruptcy filing, “the company contacted over 150 prospective transaction parties, including a broad range of strategic and financial buyers, and executed confidentiality agreements with approximately 60 parties. It received multiple letters of intent prior to the petition date and are continuing to engage with all parties regarding a potential stalking horse bid….

“The debtors intend to use the initial days of these Chapter 11 cases to convert one or more of the nonbinding letters of intent into binding commitments to purchase some or all of the debtors’ assets.”

Otherwise, Claire’s has a deal with Hilco to “liquidate all or a portion of the United States and U.S. territory stores in the event a going-concern transaction is not achievable,” Cramer wrote.

A Claire’s statement said its “retail stores in North America will remain open and continue to serve customers while the company continues to explore all strategic alternatives.”

This is the second time in seven years Claire’s has filed for Chapter 11. Cramer’s declaration said the company exited Chapter 11 in 2018 with “a business that was poised to succeed in a highly competitive retail environment.” In 2021, things were going so well that Claire’s planned to go public.

The retailer also made several adjustments to its business model, including a greater focus on online sales, non-mall locations, and store-in-stores. Yet, Cramer said, the strategy shift didn’t work: Those operations weren’t as profitable as expected, and Claire’s’ business, particularly its ear piercing services, didn’t translate well to e-tail.

“The majority of the company’s customers are young individuals who do not themselves have access to funds, credit cards, or the ability to shop online,” he said in the declaration. “These customers rely on their parents or caretakers to bring them to the company’s stores so that they can see and touch the company’s products. [Claire’s] struggled to create an online website that could compare to the tactile shopping experience that is so vital for its young customers.”

While all this was happening, the piercing market became more competitive, Cramer noted.

“Specialty retailers that offered ear piercing services, like Lovisa, Rowan, and Studs, emerged with, in the aggregate, hundreds of locations across the United States, while other retailers, like Ulta and Five Below, introduced in-store ear piercing services,” he wrote.

“Other outlets, like tattoo parlors, grew in popularity as a location for piercing services. At the same time, needle ear piercing increased in popularity as compared to Claire’s touch-free piercing single-use cartridge system.”

In 2021, Claire’s raised prices to improve margins, but this just turned away customers. Cramer said the chain also increased its selection of “core products,” which left it stuck “with too many products that did not feel relevant to consumers” (and eventually had to be sold at a discount).

Just as the retailer’s fortunes were turning around in early 2025, the United States imposed heavy tariffs on imports from China, where the bulk of Claire’s products are manufactured, and that proved to be the final straw.

“The company estimated that its cost of goods sold [was] projected to increase by approximately $30 million (as of June 23, 2025) as a result of increased tariffs,” Cramer wrote. “Ultimately, the company saw a significant and unforeseen decline in same store sales, contributing to the need to commence these Chapter 11 cases.”

Claire’s was founded in 1961 as a wig retailer named Fashion Tree Industries. In 1973, Fashion Tree acquired Claire’s Boutiques, then a 25-store jewelry chain based in Chicago. In 1978, the company, now named Claire’s, began its ear piercing business, which spurred rapid expansion throughout the United States. In the years since, Claire’s has pierced over 100 million ears, according to the court filing.

In 2007, Apollo Global Management purchased the company in a $3.1 billion leveraged buyout from its then owner, the Schaefer family.

(Photo courtesy of Claire’s)