Goodbye to Claire’s: second bankruptcy in 7 years reveals what’s killing America’s youth retailers

The American multinational jewelry and accessories retailer aimed primarily at girls and preteens, Claire’s, has filed for bankruptcy for the second time in less than a decade. Fierce competition, an outdated business model, and unsustainable debt are at the heart of the company’s latest downfall.

What has happened to Claire’s?

According to multiple US media outlets, the company has filed for Chapter 11 bankruptcy protection in a federal court in the state of Delaware. This legal mechanism allows it to continue operating while it restructures its debt and corporate setup. Its North American stores will remain open during the process, while the company explores possible solutions – including a potential sale.

“This decision is difficult but necessary,” said CEO Chris Cramer in an official statement reported by CNN. “Increased competition, shifting consumer trends, and the gradual decline of brick-and-mortar retail – combined with our financial obligations – have made this move unavoidable,” he added.

Founded more than 60 years ago, Claire’s first filed for bankruptcy in 2018, when it operated over 4,500 stores worldwide. Since then, it has significantly downsized to around 2,750 locations – including its Icing brand – across 17 countries. In Spain, its presence has always been more limited, though for years it maintained a foothold in major shopping centers and outlet malls, attracting young shoppers with low-cost accessories and ear-piercing services.

Claire’s current financial situation reflects a perfect storm. In addition to carrying $496 million in debt due in 2026, the company has reportedly stopped paying interest and rent on underperforming stores, according to debt analysis firm Debtwire, as cited by CNN. Neil Saunders, analyst at GlobalData, summed it up: “Claire’s has faced a cocktail of internal and external challenges that have made it impossible to stay afloat.”

Import costs have also taken a toll. The company relies heavily on Asian suppliers – particularly in China and Cambodia – to stock its stores with inexpensive goods. But aggressive tariffs introduced during the Trump administration, which continue to have lingering effects, have significantly driven up costs, further eating into its profits.

The company has also struggled to keep up with today’s young consumers, who are more inclined to shop online and have rapidly evolving tastes. “The competition is far more in tune with what modern consumers want, and that’s left Claire’s out of the game,” Saunders added. The company now joins a growing list of US retailers that have collapsed in 2025, including Forever 21, At Home, and Liberated Brands – the latter being the owner of popular clothing label Quiksilver.

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