Future of the iconic UK high street chain with 281 shops, Claire's hangs in the balance as reports suggest up to a third of its stores could be shuttered. The popular accessories retailer is facing ‘significant’ store closures amidst mounting financial difficulties, according to recent reports.
Claire's has brought in Interpath Advisory to consult on a potential sale and restructuring of its UK operations. Having stores in major cities like Birmingham, the retail chain is reportedly at risk of closing approximately 90 stores in a deal aimed at salvaging the remainder of the business.
A significant driver of these concerns is a looming $440 million debt repayment due in December 2026. The company's financial struggles are evident in its most recent accounts, which show a net loss of $5.8 million in the year ending March 2024. The retailer’s turnover also decined to $169 million. Directors cited ‘general economic conditions like inflation, currency rates, labor supply and transportation capacity’ as factors impacting the company's operating and product costs.
Adding to the complexity, advisors at Houlihan Lokey and Alvarez and Marsal are reportedly working on a separate deal that could see Claire's American operations seek bankruptcy protection for the second time in seven years.
This potential wave of closures for Claire's mirrors a broader trend impacting the retail sector. Latest data on store closures indicates, In CY 2024, 13,479 shops across high streets, main shopping destinations, towns, and small shopping parades permanently closed their doors. This marks a significant 28.4 per cent increase from the 10,494 closures recorded in 2023. Independent retailers, typically small businesses operating between one and five stores accounted for 84.1 per cent of all store closures in 2024, with their closures soaring by over 45 per cent, according to the Centre for Retail Research.
The challenges facing Claire's underscore the volatile landscape for traditional brick-and-mortar retailers grappling with economic pressures and evolving consumer habits.
