US retail chain Claire’s has closed all standalone stores in the UK and Ireland after the company filed for bankruptcy for the second time in 12 months.
The insolvency administrators from the consulting firm Kroll confirmed that 154 locations had ceased operations. As a result, the more than 1,300 branch employees were formally terminated on April 27th. While the brand’s own stationary branch network has been closed, the brand’s 350 concession areas with other retail partners will continue to exist.
The collapse was preceded by a period of significant financial problems. The jewelry and accessories retailer has struggled to maintain market share amid the rise of ultra-fast fashion platforms in e-commerce, particularly against Chinese companies Shein and Temu. These primarily digital competitors used aggressive pricing strategies that undercut traditional low-cost retailers.
Investment firm Modella Capital, the company’s former owner, said in January that a period of alarmingly weak sales during the Christmas shopping season had put the chain in a precarious position. In addition, the environment in the shopping streets is extremely difficult. Government measures, such as increasing national social security contributions, would have further exacerbated the situation by increasing personnel costs.
However, industry analysts suspect that the retailer’s difficulties go beyond macroeconomic factors. They also attribute this to a fundamental change in aesthetic preferences among younger target groups.
Competition for Gen Alpha editions
Additional competitors also increased competition on the shopping streets, including the Irish retailer Primark and the British drugstore chain Superdrug. Both companies have recently expanded their departments for affordable accessories. Catherine Shuttleworth, the founder and CEO of Savvy Retail, told the BBC that the target group, often referred to as Gen Alpha, “now has a wider choice of discretionary spending options.”
The UK and Ireland insolvency proceedings reflect wider issues within Claire’s global organisation. The company’s US branch filed for bankruptcy for the second time last year, following initial proceedings in 2018.
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