Ear-piercing, jewelry store giant Claire's files for bankruptcy

Ear-piercing, jewelry store giant Claire's files for bankruptcy

Troy Powers
March 20, 2018

Claire's Stores Inc. filed for Chapter 11 bankruptcy protection with plans to eliminate some of the retailer's almost $2 billion in debt, the Illinois-based company announced Monday.

The company filed for bankruptcy protection in DE court on Monday and said it reached an agreement with creditors to restructure its debt. Currently, Claire's sells products in more than 7,500 locations in 45 countries and employs about 17,000 people, according to USA Today.

Claire's executives said they hope the company will emerge from bankruptcy restructuring in September.

This marks yet another in a long ling of mall boutiques and big box stores filing for similar bankruptcy protections in 2018, with Toys R Us being the first retail giant to liquidate this year.

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The company reported its restructuring efforts are supported the vast majority of its debt-holders.

"The retail industry as a whole has been challenged by shifts in consumer purchasing preferences and habits", Claire's said in a bankruptcy filing. It also expects to add more than 4,000 stores in 2018, as Claire's continues to be one of the world's leading ear-piercing chains. Declining mall traffic and the rise of online shopping have been problems for Claire's and almost every other traditional retailer. It held $2.1 billion in debt at the end of 2017. "We will complete this process as a healthier, more profitable company".

The bankruptcy was filed in the United States Bankruptcy Court for the District of Delaware.

Claire's went private in 2007 in a leveraged buyout for $3.1 billion led by private equity firm Apollo Global Management, as The Wall Street Journal reported.