Girls' Accessories Chain Claire's Files Bankruptcy

Javier Stokes
March 20, 2018

Claire's, a mall chain store best known for performing ear piercing services and selling affordable jewelry and accessories has filed for Chapter 11 bankruptcy protection.

The tween jewelry chain said it will reduce its debt by $1.9 billion.

Claire's Stores has become the latest retailer to go under as ever fewer people go to brick-and-mortar locations and more people shop online.

The company in a statement said it was confident it would come through the restructuring process, and plans to come out of Chapter 11 in September with more than $150 million in cash.

Claire's is the latest in a long list of recent USA retail bankruptcies, including Gymboree, Gander Mountain, Sports Authority Inc., Toys "R" Us, Vitamin World, RadioShack, The Limited, Rue21 and Payless shoes, among others.

In fact, while Claire's has been closing stores, it expects to open 4,000 concessions (stores within stores) in 2018, Claire's said on Monday.

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The company announced no store closings.

"This decline may be attributable to several factors, including competition from big box retailers, large tenant closures (leaving malls without an "anchor" tenant to drive foot traffic), and the increased popularity of online shopping", the company said.

Claire's further noted that it "continues to be the world's leading ear piercer", having punctured 3.5 million in fiscal 2017 in the United States alone and another 100 million worldwide.

Claire's says that it has also secured a new $135 million in debtor-in-possession financing commitments from Citigroup Global Markets Inc.

Clair's announced it has an agreement with an ad hoc group of first-lien creditors that will provide the company with $575 million in new capital via Elliott Management Corp. and Monarch Alternative Capital LP.

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