Claire's considering 'UK store closures'

Monday, October 15, 2018

Claire’s is considering plans to close a number of its British stores as the accessories chain becomes the latest high street firm to struggle in the current climate.

The company is believed to be working with restructuring firm Alix Partners on a number of options, one of which is thought to include a Company Voluntary Arrangement (CVA).

A CVA is a controversial insolvency procedure used to shed those stores under-performing, potentially putting hundreds of jobs at risk.

Claire's has more than 350 stores in the UK and dozens of concessions, according to its most recent accounts.

The news comes just days after the chain's US parent company announced that it had emerged from Chapter 11 protection after filing for bankruptcy earlier this year.

Investment funds Elliott Management and Monarch have seized control of the US arm through a painful restructuring.

Claire's could join a growing number of recognisable high street names to scale back its store estate, as consumers increasingly shop online.

CVAs have hit the headlines this year after the procedure was used by the likes of New Look, Jamie's Italian and Mothercare to shed sites and gain rent reductions.

It is understood that the talks with Alix Partners are at a preliminary stage.

Fears that the UK chain could disappear from high streets mounted earlier this year after its US parent, Claire's Stores Inc, filed for bankruptcy.

The US company announced last week that it has now emerged from Chapter 11 protection, having restructured almost 2 billion US dollars (£1.5 billion) of debt.

Chief executive Ron Marshall said Claire's had emerged as a "healthier, more profitable company" after eliminating debt and gaining access to 575 million US dollars in new capital.

However, Claire's has previously stressed that its European operations would not be affected by the American business.