The North American accessories retailer is looking to reduce its debt by nearly $1.9 billion.
NORTH AMERICA–Specialty retailer Claire’s Stores has filed for Chapter 11 bankruptcy in the U.S.
Through the “financial restructuring,” the mall chain will look to reduce its debt by roughly $1.9 billion. The retailer’s international subsidiaries are not part of the U.S. bankruptcy filings.
The company has also come to a financial agreement with its creditors–including Elliott Management Corp and Monarch Alternative Capital–who will give Claire’s around $575 million in capital.
Claire’s follows a bevy of specialty brick-and-mortar stores facing bankruptcy, a trend that can be attributed to a rise in online shopping and changing consumer behavior.
“Claire’s is growing, not shrinking, its business. The company expects its concessions business to grow by more than 4,000 stores in 2018,” according to a company statement. “Claire’s continues to be the world’s leading ear piercer, having pierced over 100,000,000 ears worldwide, and approximately 3,500,000 ears in FY2017 in the U.S. alone. The company’s iconic ear-piercing services are unmatched and cannot be replicated online. The company is utilizing the Chapter 11 process to effectuate a balance sheet–not an operational–restructuring.”
Claire’s is owned by Apollo Global Management, a private equity firm that purchased the company in 2007 for $3.1 billion.