Bankrupt jewelry retailer Claire’s to sell its North American business

People shop at a Claire's in New York. (AP Photo/Seth Wenig, File)

Jewelry retailer Claire’s said on Wednesday it would sell its North American business to private equity firm Ames Watson for US$104 million in cash, in a deal that will keep at least 795 retail locations in business.

The sale agreement will “allow the Claire’s brand to remain a prominent retailer for teens, tweens, and young girls around the world,” Claire’s said in a court document filed on Wednesday.

Ames Watson, a private holding company that owns athletic apparel brands including Champion Teamwear and Lids, is acquiring Claire’s brand and up to 950 Claire’s stores, according to court documents. Claire’s has halted “going out of business sales” at all stores that could be sold, but it will continue liquidation sales at other locations.

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Claire’s, which sells earrings and fashion accessories for teens and young girls, filed for bankruptcy in Delaware earlier this month with more than US$690 million in debt. The company, which previously filed for bankruptcy in 2018, operates more than 2,300 stores across 17 countries in North America and Europe.

Ames Watson co-founder Lawrence Berger said in a statement that the firm was “committed to investing in its (Claire’s) future by preserving a significant retail footprint across North America.”

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Ames Watson will also provide noncash considerations as part of the sale, such as taking on liabilities owed to Claire’s vendors and landlords, continuing to employ current retail staff at acquired Claire’s stores, and extending US$36 million in credit that the bankrupt company can use to address some of its pre-existing debt.

Claire’s will seek approval of the sale on Thursday at a court hearing in Wilmington, Delaware.

Claire’s has suffered in recent years from increased competition, high rent costs, and new tariffs on imports from supplier nations such as China, Thailand and Vietnam.

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Reporting by Abu Sultan and Mrinmay Dey in Bengaluru and Dietrich Knauth in New York; Editing by Rashmi Aich and Matthew Lewis