Claire’s, a decades-old mecca for female tweens and teens getting their ears pierced and buying inexpensive jewelry, is looking to mount a comeback under new ownership.
Private equity firm Ames Watson has closed a deal to acquire Claire’s brick-and-mortar operations globally out of bankruptcy for $140 million. It is also buying the intellectual property rights for the Hoffman Estates, Illinois-based retailer.
“Claire’s will emerge from bankruptcy with roughly 1,000 stores, with closures determined by the estate prior to the sale,” Ames Watson, based in Columbia, Maryland, said Thursday in a statement.
Its strategy is to try to reinvigorate those stores and modernize the piercing experience.
The transaction, announced in August, saves the jewelry-and-accessories chain from liquidation. Now only about 300 stores in Claire’s fleet will be closed. Ames Watson said it “will lead with a smaller but stronger footprint.” Claire’s had roughly 1,500 North American stores before the bankruptcy, according to court filings.
The firm — also the owner of retailers including Lids and South Moon Under — will be tasked with finding a successful strategy going forward for troubled Claire’s. The retailer, a mall staple, filed for Chapter 11 protection in early August for the second time in seven years.
Banking on 'rite of passage'
Retailers that file for bankruptcy twice often have a tough go of it and end up liquidating. But that’s not always the case. There have been instances where retailers have remained in operation under new owners, including Rue21 and David’s Bridal.
Ames Watson said it’s bullish on Claire’s prospects.
“Claire’s is an extraordinary brand with unmatched cultural resonance,” the firm said in a statement. “For decades, Claire’s has been a rite of passage and the place where generations have had their first piercings, bought friendship bracelets, or discovered their first lip gloss.”
Ames Watson enlisted RCS Real Estate Advisors as a consultant for the acquisition early on in the bankruptcy process.
“Claire’s will continue to serve consumers across North America, reflecting a more sustainable model in today’s evolving retail environment,” New York-based RCS said Friday. “Up to 950 locations will remain open, including key stores in California, New York, Florida, Illinois and other major markets.”
RCS described it as “a streamlined format.”
Leases secured
Within days of being retained by Ames Watson, RCS said it negotiated with landlords and secured preliminary agreements with hundreds of property owners across the United States and Canada, covering the majority of Claire’s regional portfolio and giving the private equity firm the confidence to proceed with the purchase.
In the weeks that followed, RCS said it finalized agreements for more than 800 stores, with the potential to reach 950, preserving the future of chain.
“By drawing on our deep landlord relationships and expertise in structuring win-win agreements, we helped preserve hundreds of stores, protect thousands of jobs and ensure that future generations can continue to enjoy the Claire’s experience,” Ivan Friedman, RCS president and CEO, said in a statement.
Ames Watson’s retail portfolio includes Lids, a sports apparel and hat retailer, which it purchased in 2019 for $101 million. It grew Lids “into a billion-dollar business” and will apply “its proven playbook for reigniting beloved retailers” to Claire’s, the private equity company said Friday in a statement.
Ames Watson “will focus on exclusivity, customization and cultural relevance” for the Claire’s chain, it said.
“The firm has a long-hold model, focused on building cash-flow-positive companies over time,” Ames Watson said. “For Claire’s, that means modernizing the core piercing experience, revitalizing stores, and leaning into cultural relevance through authentic community engagement.”
Competition from rivals
In its most recent bankruptcy court filings, Claire’s attributed its financial woes to competition from online retailers; new rivals; changing consumer habits and a shift away from malls; the impact of tariffs; underperforming stores and burdensome lease obligations.
But by instituting “elevated piercing offerings, refreshed merchandise, marketing and store concepts,” Ames Watson said the goal is to make visits to Claire’s experiences that can’t be duplicated online.
“Every turnaround we’ve done begins with people,” Tom Ripley, partner and co-founder at Ames Watson, said in a statement. “Claire’s has an incredibly passionate field team — many with 20 years or more in these stores — and their loyalty will be the foundation of this next chapter.”
In an unusual twist to the case, one of Claire’s bankruptcy attorneys, Joshua Sussberg of Kirkland & Ellis, vowed to get his ear pierced in court if finding a buyer for the chain was successful. And he made good on his promise earlier this month, when he had a Claire’s employee pierce his ear in the bankruptcy courtroom. Photos depict him sporting a Claire’s paper crown to mark the occasion.
The closing of the Claire’s acquisition was earlier reported by The Wall Street Journal.
For the record
Paul Hastings is serving as legal counsel to Ames Watson, and RCS Real Estate Advisors is serving as a real estate consultant.