Major retailer seeks protection in Canada after bankruptcy filing in the U.S.

A major retail chain is seeking creditor protection in Canada after filing for bankruptcy in the U.S.

A mall staple, fashion accessory store Claire’s filed for Chapter 11 bankruptcy protection in a federal court in Delaware on Wednesday, according to a press release from the company.

The 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, Claire’s said.

The store, which offers ear-piercing services, targets the tween and teen market and has locations across the Greater Toronto Area. There are stores in Square One Shopping Centre in Mississauga and Sherway Gardens in Toronto.

Claire’s has struggled over the years, having first filed for bankruptcy in the U.S. in 2018, reportedly to shed $2 billion in debt. The number of stores, once at around 4,500, has declined to about 2,750 locations in 17 countries.

The company notes several reasons for the financial struggles.

Chris Cramer, CEO of Claire’s, said increased competition, consumer spending trends and the ongoing shift away from brick-and-mortar retail, along with debt obligations, are behind the move.

“This decision is difficult, but a necessary one,” Cramer said in a statement. “We remain in active discussions with potential strategic and financial partners and are committed to completing our review of strategic alternatives.”

Cramer thanked employees who have “continued to work diligently in a constantly evolving consumer landscape…”

Claire’s retail stores in North America will remain open while the company continues to explore all strategic alternatives. The company intends to uphold its commitments to customers, employees, and partners, including continued payment of employee wages and benefits, Clarie’s said in the release.

It is not yet known if or when stores will close in Canada.

Claire’s was founded in 1961 in a Chicago suburb.

Lead photo: Claire’s Facebook