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Those following the unfolding story of embattled teen fashion retailer Claire's were most recently treated to a notable bit of news most recently, as the company put forth a press release on Aug. 20 indicating the purchase of a significant portion of its North American stores, and all of its intellectual property, to private equity firm Ames Watson.
"We are pleased to have the opportunity to partner with Claire's and support the next chapter for this iconic brand," said Lawrence Berger, co-founded of Ames Watson.
"Claire's has built a powerful emotional connection with generations of consumers through its focus on self-expression, creativity, and accessible fashion. We are committed to investing in its future by preserving a significant retail footprint across North America, working closely with the Claire's team to ensure a seamless transition and creating a renewed path to growth based on our deep experience working with consumer brands," he added.
Claire's has paused the liquidation process "at a significant number" of its North American stores, although it also indicated that the process would continue at the remainder. The retailer also noted that the sale is subject to court approval in both the United States and Canada, in addition to the usual closing conditions.
Claire's Private Equity Deal Something of a 'Surprise' To Some
And as Retail Dive senior reporter Daphne Howland termed it, the deal between Claire's and Ames Watson could "come as a surprise to some," particularly in the context of the company's difficulties in previously securing a buyer — in addition to a first bankruptcy filing in 2018, followed by a second, more recent filing earlier in August.
“The Debtors left no stone unturned in their sale and marketing process,” Claire's told the court on Aug. 20, as Howland noted.
"[Claire's] entered chapter 11 with multiple letters of intent and worked tirelessly with these counterparties since the Petition Date to convert the letters of intent into binding bids and, ultimately, an asset purchase agreement," the retailer added.
The deal comes attached with a "fiduciary out" should Claire's find a more attractive offer tabled, and further allows the company to completely pay off its asset-based loan.
A Number of Claire's Stores Could Remain Open, and Ames Watson Has Experience in Similar Retail Streams
With Ames Watson poised to acquire at least 795 stores in North America — with the possibility of that number rising further, to 950 — and the private equity firm signaling that it expects to retain at least some brick-and-mortar presence in these markets, the perceived end of Claire's may prove to be a premature call.
According to court documents cited by Howland, many Claire's headquarters staff will be keeping their jobs, as will the bulk of store employees currently working the front lines. That's a far cry from mere weeks ago, when Claire's detailed plans to shutter all Walmart shop-in-shops and all Icing stores, with further closures imminent.
For its part, Ames Watson either owns or holds investments in several other prominent retail brands, including Lids, Champion, South Moon Under, and Fanatics. With experience in the apparel and accessories categories — and with several of these brands exhibiting strength among contemporary consumers — could the future for the nostalgic-iconic Claire's brand somehow look brighter than in days past?