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Jewellery and accessories retailer Claire’s has reportedly brought in advisers to draw up a rescue plan amid fears it may be unable to repay a $480m (£355m) loan that is due in December 2026, according to The Telegraph.
The company, which operates nearly 300 shops in the UK and more than 2,300 worldwide, has appointed restructuring specialists at Interpath Advisory to seek investors to salvage part or all of its British business.
It is understood that the appointment of Interpath has raised expectations of a major restructuring that could include store closures and withdrawal from some countries as the group attempts to cut costs.
Claire’s UK arm has reported cumulative losses of £25m over the past three years. Accounts for the year to March 2024 show a loss of £4.7m, slightly narrower than £5m the previous year, on turnover of £137m.
Directors at the jewellery and accessories retailer attributed its performance to inflation, and unfavourable currency rates, labour supply and transportation capacity, which have collectively increased operating and product costs.
The wider group has also faced rising import costs from tariffs imposed during US president Donald Trump’s trade war, as well as growing competition. This is because much of Claire’s low-cost merchandise is sourced from China.
The group has also retained advisers at Houlihan Lokey and Alvarez and Marsal to work on a deal that could see its American operations seek bankruptcy protection for the second time in seven years.
Earlier this year, Claire’s began measures to conserve cash and deferred interest payments on its debt, planning to cover the interest with additional borrowing. According to Bloomberg, the loan has since dropped to about 39 cents on the dollar.
Claire’s filed for Chapter 11 bankruptcy in 2018 and emerged four years later under the control of its largest creditors, including hedge funds Elliott Management and Monarch Alternative Capital.
Claire’s has been approached for comment.
