When a business closes, management almost never holds itself accountable.
While you might see that from a football coach, you never see it from a CEO. The football coach, who generally knows he’s getting fired, will take responsibility and say that at the end of the day, everything that happens is his responsibility.
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Most CEOs will do everything except that. They will tell you about all of the economic problems that have led to their failure, and will point out some inconsequential sign that their efforts are working.
“Yes, sales dropped by 50% and foot traffic fell to mostly people looking to use the bathroom, but sales in women’s headbands increased during the final two weeks of the quarter,” seems typical for what a failing executive might say.
In reality, while you can sometimes blame external factors for why a retailer fails, it’s often actually management’s fault.
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Prices fluctuate, markets change, and customer bases evolve. As a leadership team, it’s your job to make the needed changes to keep your business in line with your customers.
Mall retailer Claire’s has failed to do that, and its owners are considering selling the company, filing Chapter 11 bankruptcy for the second time, and other strategic alternatives.
Claire’s faces second bankruptcy, sale
“The chain’s owner has been shopping Claire’s partially due to concerns over President Donald Trump’s tariffs impacting pricing and margins. The company also has a $500 million loan coming due in December 2026,” according to an earlier TheStreet story. “If a buyer cannot be found, the owners could sell the global brand in pieces in order to pay off its debts.”
Kirthi Kalyanam, distinguished professor and executive director of the Retail Management Institute at the Leavey School of Business at Santa Clara University, shared some thoughts on Claire’s with TheStreet.
He believes that the chain has not kept up with the times.
“The tween segment is a very volatile segment where trends ebb and flow rapidly. Even in the best of times, it is hard to stay on top of this segment. They exhibit FOMO behavior, back-to-school seasonality and are susceptible to weather. Tweens do not seem to show loyalty to specific retailers. They are more trend-driven,” he wrote.
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That has led Claire’s audience to other retailers.
“This segment is a very influenced online. Think TikTok and Shein and Instagram. This is where trends are created. This makes the retail business even more susceptible to changing fashion,” he added.
Claire’s has not evolved
Claire’s has remained a store that’s driven by foot traffic.
Overall, while mall traffic fell in June, it was up in April and May.
“In June 2025, shopping center traffic fell slightly following two straight months of year-over-year (YoY) visit growth – although indoor malls continued to show the strongest performance, with just a 0.7% drop in YoY June visits. (Open-air shopping centers and outlet malls saw YoY visit declines of 1.6% and 4.4%),” according to Placer.ai data.
Kalyanam, however, thinks that while mall traffic may not have been an issue, tweens are still making some of their purchases online.
“This segment is very, very digital forward. My sense of Claire’s is that they do not have an image of a digitally savvy retailer. I searched for a unicorn bracelet on their web site and got very poor results,” he wrote. “They are being outpriced by Shein and TikTok. The items at Claire’s are priced at $8.99, and comparable items at TikTok or Shein are priced at $2.99.”
He also shared that parents have been helping younger shoppers move away from some in-store buying.
“I know that tweens are not supposed to have online accounts at Tiktok, but they do. I also suspect that their parents will buy things for them. I also suspect that due to driving restrictions, visiting stores (which is the core of Claire’s business model) is a bit harder for this segment,” he added.
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Kalyanam has his doubts about Claire’s long-term survival, even though its piercing business can’t move online.
“All in all, I think it is very challenging for this format to survive, and the piercing, etc. is not enough of a moat to sustain the retailer. This is reflected in the prior bankruptcy of this retailer. This segment of the retail business is becoming an online media business, and I am not sure if Claire’s has the capital or the bench strength to execute this,” he shared.
Great Job Daniel Kline & the Team @ TheStreet Source link for sharing this story.
