Claire’s Files for Bankruptcy Protection in Canada After US Filing

Popular mall retailer Claire’s has sought bankruptcy protection in Canada following its Chapter 11 filing in the US. The company’s stores will remain open while restructuring under court supervision.

On August 6, 2025, Claire’s Holdings LLC filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the District of Delaware, according to The Canadian Press. At the sames time, its Canadian affiliate filed under Canada’s Companies’ Creditors Arrangement Act (CCAA) before the Ontario Superior Court of Justice.

Despite the filings, Claire’s stores across North America will stay open while the company works to restructure and consider strategic alternatives.

Why Claire’s Is Restructuring

CEO Chris Cramer called the move “difficult but necessary,” pointing to key factors that have hurt the company’s bottom line:

• Increased competition from online and fast fashion retailers
• Changing consumer spending habits
• Ongoing shift away from brick-and-mortar shopping

Claire’s joins a growing list of retail brands struggling to adapt to changing retail trends and digital disruption.

A Longtime Retail Staple Faces Uncertainty

Founded in 1974, Claire’s built a presence in malls, serving customers between the ages of 3 and 18. The company currently operates more than 2,750 stores in 17 countries, including Canada, the US, and across Europe.

It remains unclear whether Claire’s will close stores or lay off staff in Canada as part of its court-supervised restructuring. Further updates are expected once its CCAA filing proceeds.

Employee Rights When a Company Files for Bankruptcy

When a company like Claire’s formally files for bankruptcy under the BIA or CCAA, employees may be terminated, but their ability to collect severance is severely limited.

Employees become unsecured creditors — meaning they are at the back of the line when assets are divided.

What That Means:

• In theory, workers are owed up to 24 months’ compensation as severance pay in Canada when terminated without cause — even if a company closes.
• In reality, when bankruptcy is declared, employees are unlikely to receive full severance because secured creditors (like banks) get paid first.
• Outstanding wages, vacation pay, or expenses may be partially recoverable through the Wage Earner Protection Program (WEPP).

Lost Your Job But No Bankruptcy Filed? We Can Help

If your employer has fired you, shut down operations, laid off staff, or stopped paying wages — but hasn’t formally filed for bankruptcy protection — Samfiru Tumarkin LLP can help your get up to 24 months’ pay in severance.

Speak with an employment lawyer in Ontario – we’ve helped tens of thousands of non-unionized individuals across the country resolve their workplace issues.

Call us today at 1-855-821-5900 or request a consultation online.

Disclaimer: The materials above are provided as general information about the rights of non-unionized employees in Canada. It is not specific to any one company and SHOULD NOT be read as suggesting any improper conduct on the part of any specific employer, or a relationship between Samfiru Tumarkin LLP and a specific employer.