Good news for Claire’s customers! The retailer has announced it will close fewer stores than initially expected, after the company filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code. Originally, nearly one thousand locations were set to close — here’s how many will actually shut down now.
How many stores will Claire’s close?
According to documents filed last week with the U.S. Bankruptcy Court in Delaware, the company will now close only 291 locations, including both Claire’s and Icing stores.
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This change comes after an offer was made by Ames Watson, a private equity firm that intends to acquire the brand for $140 million. So far, the deal has not been finalized, as it still requires court approval.
When will the Claire’s stores close?
The closures will be completed by September 7 of this year at the latest.
Why are Claire’s stores closing?
The company has voluntarily filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Delaware to maximize the value of its business. Its Canadian subsidiary also plans to pursue a similar proceeding in Ontario. The company aims to monetize its assets and continue exploring potential strategic partnerships. This decision responds to increasing competition, changes in consumer spending, declining foot traffic in physical stores, and economic pressures. Claire’s plans to secure liquidity during this process and stated that its North American stores will remain open and continue operating normally while the company explores future alternatives.
Can I Still Shop at Claire’s Stores?
Yes. The company stated it plans to maintain liquidity during the bankruptcy process and confirmed that its stores in North America will remain open, continuing normal operations while future options are explored.
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What is Chapter 11 of the U.S. Bankruptcy Code?
Chapter 11 allows companies to reorganize their debts, typically with the goal of continuing operations. It is one of the most complex bankruptcy procedures, in which the company must present a detailed reorganization plan and negotiate with creditors.
This legislation provides businesses with a chance for a fresh start, although it may also result in the partial transfer of asset ownership to creditors. As a result, business owners must carefully assess the costs and benefits before deciding to file for bankruptcy.
What benefits does Chapter 11 offer?
This section serves as an alternative to penalties, meaning that the company or individuals seeking it can avoid immediate dissolution, liquidation, and drastic cuts. During this process, the law allows the entity to continue operating and restructure without pressure from creditors. At the same time, it enables them to negotiate and propose a repayment plan for their debts.
Moreover, reorganization procedures under Chapter 11 offer the advantage that the company’s management retains control over the business, making the reorganization plans generally more effective, as the executives who stay in charge are the ones best familiar with the company, partnership, or individual involved.
