Many retailers located inside shopping malls have been struggling in recent years. 

While Americans aren’t exactly curbing their spending habits and shopping less, they’re just shopping differently. 

Related: Iconic candy store suddenly shuts down after over 60 years

Part of that change means they’re shopping less frequently at traditional malls in favor of outlet malls, discount retailers, or online. 

This has forced many retailers that focus a majority of their stores in and around malls to rethink their business plan. 

“Retailers are trying to close out all of the locations that no longer work,” GlobalData Retail analyst Neil Saunders told CoStar News. “Profits are under a great deal of pressure, so companies are looking carefully at the performance of their portfolio across all outlets and property types, and the weakest performers and those with the weakest prospects are ones in traditional malls.”

Mall retailers closing hundreds of stores

Once-iconic brands have been shutting down underperforming stores. In the past several years, the following stores have closed hundreds of stores: 

• Sears 
• Foot Locker
• Macy’s
• JC Penney

When huge anchor stores pull up stakes, it puts enormous pressure on malls to make ends meet. 

And now, Claire’s, a popular jewelry and accessory store primarily located in U.S. shopping malls, has been having issues finding profitability and may soon file for bankruptcy.

Claire’s is exploring another bankruptcy.

Image source: UCG/Getty Images

Claire’s is reportedly exploring Chapter 11

Claire’s, which was once a popular destination for tweens and young, primarily female shoppers to get things like jewelry, accessories, and piercings, has met with financial troubles. 

It has been losing sales as fewer shoppers frequent malls. 

And it’s facing tough competition from online fast fashion retailers, like Shein and Temu, which can easily keep up with constantly-changing trends and undercut prices. 

So Claire’s has reportedly missed its June and July rent payments in some stores. 

And now, sources familiar with Claire’s are reporting that the chain is considering filing for Chapter 11 bankruptcy protection imminently. 

Bloomberg reports that Claire’s may file for bankruptcy “as soon as this week.”

“Claire’s has been exploring restructuring options, including a possible sale, amid weakened cash flow and a heavy debt burden. Earlier this year, it chose to conserve cash by deferring debt interest payments, Bloomberg reported at the time,” it continues.

Claire’s filed for bankruptcy in 2018

This wouldn’t be the first time Claire’s has filed for bankruptcy. 

The mall chain filed for Chapter 11 bankruptcy protection in March 2018, which gave over control of the company to creditors Elliott Management and Monarch Alternative Capital.

It carried about $2 billion in debt at the time of its filing.

Claire’s exited bankruptcy later in 2018, but continued to carry with it the underlying issues associated with many mall retailers, including a lack of enthusiasm for brick and mortar shops located within malls.

And as more mall retailers continue to struggle, mall footprints are expected to shrink overall in the U.S.

“There are roughly 700 malls in America today, according to data from analyst Coresight Research, down from about 2,500 in the mid 1980s and a figure expected to shrink further. Some forecasts have estimated there will be as few as 250 malls before the end of this decade,” CoStar writes.