16th Oct 2018 16:36
LONDON (Alliance News) - Claire's is considering a raft of British store closures as the troubled fashion accessories chain becomes the latest high street firm to show signs of distress.
The Press Association can reveal that the company is believed to be talking to restructuring firms regarding a number of options, one of which is thought to include a Company Voluntary Arrangement, a controversial insolvency procedure used to shed under-performing sites.
Claire's has more than 350 stores in the UK and dozens of concessions, according to its most recent accounts.
Hundreds of jobs could be at risk if the chain presses ahead with a CVA.
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 PLC to shed sites and gain rent reductions.
It is understood that the talks 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 USD2 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 USD575 million in new capital.
However, Claire's has previously stressed that its European operations would not be affected by the American business.
Marshall said that the firm has no current plans to embark on a CVA, but did not comment on the talks with restructuring groups.
"Any stores we do close or open in the UK would be as part of our normal course of business," he said.
By Alys Key, Press Association City Reporter
source: Press Association
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