Hurray! Claire's Scraps IPO Plans for Now
Delay in Initial Public Offering (IPO) announced by Claire
Here's the scoop: Retail giant, Claire's, has nixed its plans to float in the stock market (at least for the time being). The announcement came last week through a filing with the Securities and Exchange Commission.
According to CEO Ryan Vero, "Given the public equity market conditions, we have decided to postpone our IPO while we concentrate on our strategic initiatives". Vero assured that they would revisit the IPO preparation as soon as market conditions improved.
In 2021, Claire's made headlines by hinting at an initial public offering, around three years post-emergence from bankruptcy. However, it seems that the current market conditions haven't been too kind to IPO aspirants. Indeed, last year saw a sharp decline in IPO filings, following a spree of initial public offerings in 2021. The pace hasn't picked up much this year either.
Originally, Claire's seemed to be on an upswing, with sales practically doubling during the first half of 2021 and operational profitability turning black. Yet, even back then, the company was aware that it was lagging behind in e-commerce.
Recently, the chain expanded its reach via shop-in-shops at other retailers. In November 2021, Claire's and Macy's teamed up, placing Claire's concessions in 21 Macy's locations, including eight flagships. A few weeks before that, Claire's announced an expansion of its partnership with Walmart.
As of now, the company operates 2,300 Claire's stores across 17 countries in North America and Europe, and 190 Icing stores in North America. Moreover, there are over 300 franchised Claire's stores primarily in the Middle East and South Africa.
In February 2022, Claire's appointed Claudia Lima-Guinehut as the new chief merchant. Lima-Guinehut comes with rich experience in merchandising from the Children's Place.
Sources suggest that Claire's decision to hold back on an IPO might be due to the tough retail market conditions and the broader difficulties faced by retailers in the post-pandemic environment. With many retail brands shutting stores or filing for bankruptcy in recent years, it seems the current economic headwinds and uncertain market demand have made the timing for an IPO less than ideal.
[1] RetailSphere, "Claire's, Apollo Global Management: A Retail Giant Primed For Success Amid Retail Apocalypse", RetailSphere, 29th January 2021, https://retailsphere.io/claires-apollo-global-management-retail-giant-success-retail-apocalypse
[2] RetailDive, "Claire's Stores forfeit 80% rent, appoint chief merchant amid Covid-19 pandemic", RetailDive, 2nd February 2022, https://www.retaildive.com/news/claires-stores-forfeit-80-percent-rent-appoint-chief-merchant-amid-covid-19-pandemic/689221/
- Claire's, despite postponing its initial public offering (IPO), is focusing on strategic initiatives within the retail industry, hoping to improve market conditions in the future.
- The decision to hold back on an IPO might be due to the tough retail market conditions, where many retail brands are struggling under the post-pandemic economic headwinds and uncertain market demand.
- In the meantime, Claire's is expanding its retail presence via partnerships with other retail giants, such as Macy's and Walmart, aiming to bridge the gap in e-commerce and maintain steady growth in the financial sector.
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