Claire’s to seek creditor protection in Canada, contemplating liquidation: court docs

Claire’s Stores Canada Corp. is considering liquidating its shops as it begins seeking reprieve from creditors, including landlords who have locked out the business.

In an application filed with the Ontario Superior Court on Wednesday, the accessories and cosmetics retailer said it needs creditor protection to “provide the breathing space necessary to determine and pursue next steps, which at present is likely to consist of an orderly liquidation and wind-down of its operations.”

The company runs about 120 stores across Canada but also sells merchandise for teens and tweens in an additional 600 shops run by other retailers like Walmart and Toys “R” Us. It has about 700 employees across the country.

“This decision is difficult, but a necessary one,” Chris Cramer, CEO of Claire’s, said in a press release announcing the creditor protection filing.

“Increased competition, consumer spending trends and the ongoing shift away from brick-and-mortar retail, in combination with our current debt obligations and macroeconomic factors, necessitate this course of action for Claire’s and its stakeholders.”

Its Canadian court application came on the heels of its parent company Claire’s Holdings LLC seeking bankruptcy protection in the U.S. this week. The parent made a similar filing in 2018 but rebounded later that year under new owners Elliott Management Corp. and Monarch Alternative Capital.

While the Canadian business is carved out as a subsidiary, it relies on the parent and its U.S. entities for inventory as well as executive, legal, accounting, human resources and information technology services. On average, Canadian sales make up approximately six per cent of the global Claire’s business.

In a filing made with an Ontario court, the company said, “Claire’s has concluded that there is not enough capital available to restructure the Claire’s business in the U.S. and properly resuscitate the Canadian business to achieve profitability.”

It reached this conclusion because consumers have moved away from malls and in-store shopping experiences toward e-commerce, said an affidavit from Suzanne Stoddard, the senior vice-president and chief accounting officer at Claire’s.

The shift was hastened in the COVID-19 pandemic, when stay-at-home policies and social distancing “all but eliminated foot traffic” at Claire’s. However, the business was well positioned to capitalize on pent-up demand when it reopened the majority of its stores in May 2020, as COVID restrictions began to ease, Stoddard said.

Though 2021 brought a strong fiscal performance, Claire’s thought the shift toward e-commerce would continue and result in decreased sales and revenues associated with its core brick-and-mortar business. 

It looked to counter the trend by venturing into strip malls and store-in-store formats inside Walmart locations and expanding its digital presence. (All e-commerce sales in Canada are done through the U.S. company.)

The strategy, especially the digital component, did not fare well.

“Online shoppers typically do not purchase a sufficiently large quantity of Claire’s low-price products in a single e-commerce transaction to justify related shipping costs,” Stoddard said in her affidavit. 

“Moreover, the majority of Claire’s customers are young individuals under the age of 18 who typically do not themselves have access to funds, credit cards, or the ability to shop online. Accordingly, Claire’s has struggled to create an online website that could compare to the tactile shopping experience that is so vital for its young customers.” 

It also had a hard time hanging onto customers when it increased prices to bolster margins, moved away from trendier products to produce more core merchandise and went head-to-head with competitors like Shein, Temu and Lovisa, Stoddard said.

As the company’s troubles mounted, Claire’s found it hard to pay rent. Since July 1, it has received 26 lease termination notices from Canadian landlords and is locked out of 16 stores “exacerbating” its “dire cash flow circumstances,” it said in a court filing.

The document said Claire’s history stretches back to 1961, when Rowland Schaefer started a wig retailer known as Fashion Tress Industries. 

It acquired Claire’s Boutiques, a 25-store jewelry chain that catered to women and teenage girls, in 1973 before widening its array of merchandise.

In June 2025, Claire’s began exploring selling some or all of its assets in North America and abroad.

The company has received multiple letters of interest, but none involved a stand-alone purchase of the Canadian business and assets.

This report by The Canadian Press was first published Aug. 6, 2026.