By Laya Neelakandan
Copyright cnbc
Claire’s is headed for a major makeover.
The tween retailer, known for its ear piercing stations, jewelry and purple carpeting, declared bankruptcy in early August, the second time in seven years, citing nearly $500 million in debt and an increasingly competitive environment.
Weeks later, private holding company Ames Watson announced it was buying up roughly 1,000 Claire’s stores across North America in a $140 million deal to rebuild the brand. The announcement paused the liquidation process at most Claire’s stores.
“We went and started to do some very deep due diligence, and we came to the conclusion that this was a broken business, not a broken brand,” Ames Watson co-founder Lawrence Berger told CNBC.
Ames Watson’s portfolio includes makeovers of other businesses, including hat retailer Lids and women’s retailer South Moon Under. Berger said the company, which has more than $2 billion in revenue, thinks of itself as a “mini Berkshire Hathaway,” buying and transforming companies without any intentions of selling them.
On top of its mounting debt, Claire’s has been facing a multitude of challenges. The retailer is expected to face headwinds from President Donald Trump’s global tariffs, and malls have seen dwindling traffic over the past few years. Competitors, like Studs and Lovisa, have also popped up, aiming to offer sleeker ear piercing experiences.
Fellow Ames Watson co-founder Tom Ripley said he was first introduced to Claire’s through his twin daughters, who both got their ears pierced at one of the retailer’s stores over a decade ago. Ripley said that experience, coupled with customers’ loyalty to the brand, showed him that it was worth investing in.
“It’s a temple to girlhood and that place you buy your first lip gloss, a friendship bracelet and your first piercing,” Ripley told CNBC. “Claire’s has been a rite of passage to generations.”
