Disclosure statement details asset purchase agreement that would save up to 975 stores and thousands of jobs while winding down remaining business
Claire's Holdings LLC filed a comprehensive disclosure statement on August 19, 2025, seeking creditor approval for a $140 million going-concern sale that would preserve the majority of its retail operations while avoiding a complete liquidation of the iconic teen jewelry chain.
The 52-page disclosure statement, filed in the U.S. Bankruptcy Court for the District of Delaware, details an asset purchase agreement with AWS Claire's, LLC that would transfer between 795 and 975 retail locations along with the company's intellectual property, distribution centers, and inventory to a buyer group led by Ames Watson, LLC.
"The Sale Transaction will preserve thousands of jobs, provide continued business to hundreds of the Debtors' vendors and landlords, and will allow the Claire's brand to remain a prominent retailer for teens, tweens, and young girls around the world," the company stated in the disclosure statement filed under Case No. 25-11454 (BLS).
Strategic Pivot from Liquidation to Going-Concern Sale
The disclosure reveals how Claire's successfully executed a dramatic strategic pivot after initially beginning store-closing sales across its entire chain. The company had entered into a fee-for-service liquidation agreement with Hilco Merchant Resources in July 2025 and commenced full-chain liquidation on August 8, 2025, following an interim court order.
However, Claire's maintained crucial flexibility in its liquidation agreement, allowing it to halt the process if a viable going-concern transaction emerged. That foresight proved pivotal when the buyer group materialized during the chapter 11 process.
"On August 16, 2025, the Debtors exercised their right to stop liquidation sales at approximately 950 stores to facilitate the execution of the Sale Transaction," according to the disclosure statement.
The asset purchase agreement was executed just two days later on August 18, 2025, representing what Claire's describes as "the best and the only viable offer for the Going-Concern Assets" after an extensive marketing process that contacted over 160 potential buyers.
Transaction Structure and Value
The going-concern sale is structured as a $104 million cash payment plus a $36 million seller note, with the total consideration subject to purchase price adjustments. Additionally, the buyer will assume cure costs for all assigned contracts and various operational liabilities, including employee-related obligations at the acquired stores.
The transaction encompasses Claire's most valuable assets, including retail leases for up to 975 locations, all inventory and tangible property at those stores, the company's intellectual property portfolio, and distribution centers. The buyer will also assume numerous liabilities, providing continuity for employees, vendors, and landlords at the preserved locations.
The disclosure statement emphasizes that proceeds from the sale will enable Claire's to fully pay down its $63.5 million asset-based lending facility, cure all assumed contracts and leases, and fund distributions under its chapter 11 plan of reorganization.
Creditor Voting Process and Plan Structure
Claire's is seeking approval from two classes of secured creditors: holders of Priority Term Loan Claims ($125.5 million) and Existing Term Loan Claims ($522.5 million). The disclosure statement initiates a formal solicitation process, with voting deadlines and a combined confirmation hearing to be scheduled by the bankruptcy court.
Under the proposed reorganization plan, secured creditors will receive distributions according to a waterfall structure based on collateral priorities established in intercreditor agreements. General unsecured creditors are not expected to receive any recovery, with their claims to be discharged upon plan effectiveness.
The plan contemplates Claire's continuing as "Wind-Down Debtors" after the asset sale closes, with a Plan Administrator overseeing the liquidation of remaining assets, resolution of disputed claims, and ultimate dissolution of the corporate entities.
Extensive Marketing Process Yields Strategic Buyer
The disclosure statement details Claire's comprehensive dual-track marketing process that began in June 2025 under the guidance of investment banker Houlihan Lokey. The process involved contacting over 160 prospective buyers, executing approximately 60 confidentiality agreements, and conducting nine management presentations.
"The Debtors received three letters of intent prior to the Petition Date and two letters of intent after the Petition Date. Two of the letters of intent were for a going-concern transaction and the others were primarily for the Debtors' intellectual property assets," the filing states.
The emergence of AWS Claire's, LLC as the successful bidder represents a significant victory for stakeholders, as it preserves the core operations of a brand that has served as a "rite of passage" for millions of girls through its ear-piercing services since 1978.
Legal Representation and Court Oversight
The disclosure statement was filed by Richards, Layton & Finger, P.A. as Delaware counsel and Kirkland & Ellis LLP as lead restructuring counsel. The case is being overseen by Judge Brendan Linehan Shannon in the Delaware bankruptcy court, with the proceedings jointly administered for all 14 debtor entities.
The company's Canadian affiliate, Claire's Stores Canada Corp., is pursuing parallel proceedings under Canada's Companies' Creditors Arrangement Act to facilitate approval of the Canadian components of the asset sale.
Stakeholder Impact and Future Operations
For Claire's approximately 13,000 global employees, the going-concern sale represents a lifeline that will preserve thousands of jobs that would have been lost in a complete liquidation. The transaction also provides continuity for hundreds of vendors and landlords who will continue their relationships with the preserved store locations under new ownership.
The disclosure statement notes that the buyer group will assume employee-related liabilities at the acquired stores, ensuring seamless continuation of operations for preserved locations. Meanwhile, the orderly wind-down of remaining operations will allow for an efficient distribution of assets to creditors while minimizing administrative costs.
The successful negotiation of this going-concern sale demonstrates how strategic flexibility in chapter 11 proceedings can yield superior outcomes for all stakeholders compared to immediate liquidation, preserving valuable going-concern elements while still addressing the underlying financial distress.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a lengthy court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.