A HUGE retailer is reportedly in discussions over a rescue deal to save struggling accessories chain Claire’s.
Lakeland owner Hilco Capital has entered the race to take over Claire’s, which crashed into administration last month and stopped all online orders.
A source told Retail Week any deal could potentially be reached for as little as £1 because of its complicated financial ties to its now bankrupt US parent company.
The source said the situation is “all a bit of a mess”.
“They have little cash on the balance sheet, they’re barely profitable, loads of outstanding leases, and while they have a decent amount of stock, in a distressed sale that isn’t really worth much. It’ll be pennies in the pound,” they said.
Two more retail heavyweights have already put forward bids to acquire the chain.
They are Modella Capital, which recently bought WHSmith’s high street stores, and Doug Putman, which famously saved HMV.
Hilco was previously linked with taking over Claire’s UK and Ireland business back in July.
But it ended up walking away from the auction just a few weeks before the chain’s US parent company collapsed.
The Claire’s US arm filed for bankruptcy on August 7 and it’s now found a buyer for 950 of its stores.
Meanwhile Claire’s UK and Ireland fell into administration on August 13 and administrators Interpath were appointed the same day.
The retailer’s 306 stores have remained open and no jobs have been lost currently.
But any buyer would likely need to undertake a significant restructuring of the business as only around 100 of its stores are considered profitable.
Claire’s has suffered a £25million loss over the past three years.
The company’s UK operations were hit hard by rising costs, inflation, and changing shopping habits, as budget-conscious customers increasingly turn to online platforms like Amazon and Temu.
More high street troubles
Rising costs, lower footfall and decreased consumer spending have all hit retailers.
Bodycare, which begun as a market stall in Lancashire back in the 1970s and has 147 UK stores, appointed administrators from Interpath Advisory last week.
It has already closed 32 stores with immediate effect, making around 450 employees redundant.
River Island and Poundland have avoided going into administration by getting creditors to agree to restructuring plans, which included closing stores and cutting jobs.
River Island will close up to 33 stores in January to help write off the fashion brand’s debts.
Meanwhile, Poundland’s restructuring will see the chain close a total of 68 stores.
The restructure also includes rent cuts at up to 180 stores and the closure of its frozen food and online shopping.
Plus, fashion retailer New Look has closed a dozen sites in the UK this year and also exited Ireland.
Retail pain in 2025
The British Retail Consortium previously predicted the Treasury’s hike to employer National Insurance contributions this year would cost the retail sector £2.3billion.
The Centre for Retail Research (CRR) also warned that around 17,350 retail sites are expected to shut down in total this year.
It comes on the back of a tough 2024 when 13,000 shops closed their doors for good, already a 28% increase on the previous year.
Professor Joshua Bamfield, director of the CRR said: “The results for 2024 show that although the outcomes for store closures overall were not as poor as in either 2020 or 2022, they are still disconcerting, with worse set to come in 2025.”
Professor Bamfield also warned of a bleak outlook for 2025, predicting that as many as 202,000 jobs could be lost in the sector.
“By increasing both the costs of running stores and the costs on each consumer’s household it is highly likely that we will see retail job losses eclipse the height of the pandemic in 2020.”