Girls' accessories chain Claire's files for bankruptcy

Andrew Cummings
March 19, 2018

Claire's, which had over $1.3 billion in annual sales, joins several other US retailers in bankruptcy as people increasingly shop online, shunning specialty brick-and-mortar stores. Claire's, the chainstore known for its tween jewelry and ear piercing, declared bankruptcy on Monday, the latest retailer to succumb to the online shopping revolution.

Members of anAd Hoc Group of First Lien Creditors have agreed to provide the company with approximately $575 million of new capital, including financing commitments for a new $75 million asset-based lending facility, a new $250 million first lien term loan, and $250 million as a preferred equity investment.

"This transaction substantially reduces the debt on our balance sheet and will enhance our efforts to provide the best possible experience for our customers", Marshall said in the statement.

Claire's said Monday it is "confident" it will emerge from bankruptcy protection in September, having reduced its debt by almost $2 billion. Toys R Us announced last week that it would close or sell all its stores after filing for Chapter 11 bankruptcy protection previous year.

Claire's made the move as it announced it was looking to restructure $1.9bn in debts it built up after being taken over by Apollo Global Management in 2007.

The company sells its products at more than 7,500 locations in 45 countries around the world. At the time, the company had about $2.2 billion in net debt that was going to start to mature in the next few years.

The company pointed to strong earnings minus debt costs and ear piercing services that are not affected by online competition.

Other reports by iNewsToday