Claire's may close all its stores

Claire's Stores Inc. , a network of fashion accessories, is preparing to file for bankruptcy in the coming weeks, according to people familiar with the information.

Фото: Depositphotos

The firm was faced with debt in the amount of $ 1,4 billion, and next week will pay interest in the amount of $ 60 million, which could lead to the closure of stores in the United States.

According to Bloombrg, an accessories store that is popular with teenage girls, hopes to avoid taking decisive action by making a deal to reduce the debt in the amount of $ 2 billion.

The current leverage is more than 10 times its annual income. Next year, more than $ 1,4 billion will be repaid, but a lot of pressure will be associated with interest payments of $ 60 million to March 13. Applying for bankruptcy for an 11 clause, which is typical of retailers, will allow the network to continue to function and retain lenders.

Since the beginning of 2017, many retailers in the United States have announced the closure of stores, among them Sears, JC Penney, Payless Shoe Sourceand Ralph Loren flagship store in New York, a wave of store closures continues Macy's.

Attendance at shopping centers has declined over the years with the growth of e-commerce.

Between 2010 and 2013, Americans started to walk less in 50% shopping centers. People began to visit restaurants more often, travel and spend money on technology. Less money goes to clothing and accessories.

Due to the closure of many stores, the same fate awaits shopping centers. In order to reduce losses, they will have to quickly find a replacement for the tenant of a massive retail space, which is almost impossible.

This can have serious consequences for shopping centers, where it is more difficult to turn empty space into apartments, according to analysts. Real Estate Research Firm Green street advisors estimates that about 30% of all shopping centers fall into this category. This means that almost a third of all shopping centers are in danger of dying out as a result of the closure of stores.

Blame the Internet?

Not so simple. RetailTouchPoints gathered the opinions of experts and indicates the reasons:

- In the USA - 2,18 square meters of retail space per person, compared to 1,52 square meters in Canada and 1,03 square meters in Australia - the next 2 countries with the highest level of retail space per capita, according to the October report Morningstar;
- A lot of objects were built in 50-60-70 and simply outdated morally and physically, they are unprofitable to rebuild and easier to close;
- in 2016, there was a 1221 shopping center in the USA, which is 300% more than in 1970 - too many unnecessary objects;
- traffic in cities is changing, many new roads, junctions and neighborhoods have been built in recent decades, and some objects are simply “on the sidelines”. Many shopping centers were built under certain anchor tenants and did not survive their departure;
- trite competition increases;
- the preferences of customers change, and not everyone has time to comply;
- New shopping centers include public spaces, restaurants, apartments and much more, which creates a center of attraction.
In this regard, the development of online trading as a reason for “mass closures” acts as a scapegoat and a convenient reason, covers up the incompetence and conservatism of retailers and developers.

What does the store expect?

According to the idea store as a platform - a place to create relationships and a concentration of value, convenience and accessibility, will help retailers to attract customers. Retailers will seek to cover as many needs as possible in their spaces. The store will be a hairdresser, pharmacy, clinic, etc.

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