Claire's France avoids liquidation, for now

Paris - The Paris Commercial Court kept the French subsidiary of low-cost jewellery retailer Claire's in receivership on Thursday. This decision followed the submission of a takeover bid from three companies, which was deemed "very minimalist" by lawyers for the staff representatives.

The court opened receivership proceedings for Claire's France at the end of July. Management justified this move by citing a continuous decline in in-store sales over several years. This decline was accelerated by US customs duties on Chinese products, which Claire's uses extensively.

An observation period was then opened. The court decided on Thursday to maintain this period until the end of January following a call for tenders for a partial takeover of assets. The court had the option of ordering immediate liquidation but chose not to.

Three bids have been submitted, Khaled Meziani and Eve Ouanson, the lawyers representing the staff, told AFP on Wednesday. They did not reveal the identity of the potential buyers.

They consider the bids "very minimalist", particularly with regard to employment. "We fear a massive redundancy plan," lamented Ouanson.

According to Meziani, "what interests the buyers is not necessarily Claire's products, but rather the store locations." This could mean the disappearance of the Claire's brand in France. According to a source close to the matter, the court could approve one of the partial takeover bids by the end of October.

Present at the hearing on Wednesday, dressed in their employee T-shirts, Claire's employees expressed their concerns.

"The teams are at breaking point psychologically; we have had no communication from management since the company was placed in receivership," lamented Rachelle, an employee at a Parisian store, who did not wish to reveal her surname.

The brand, known for its fashion earrings, piercings and accessories for teenagers, had approximately 250 stores and between 800 and 1,000 employees at the beginning of 2024, according to the latest published accounts.

These also showed that the subsidiary generated a net profit of 1.3 million euros in the financial year ending 2024, and 0.8 million euros in the previous financial year.

At the beginning of September, staff representatives reported facts to the court that they describe as "serious irregularities in the management of the company." They accused the American parent company of having "emptied the coffers" via "financial flows" between the group's numerous subsidiaries.

The management of Claire's France declined to respond to AFP's requests for comment.

This article was translated to English using an AI tool.

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