Teen jeweler and ear piercing destination Claire’s Stores, Inc. has filed for Chapter 11 in Delaware. Claire’s international subsidiaries are not part of the Company’s U.S. chapter 11 filings.
“The company’s management is confident that, through the restructuring process, Claire’s will cement its position as one of the world’s leading specialty retailers of fashionable jewelry, accessories, and beauty products for young women, teens, “tweens” and kids for many years to come. Unlike other retailers that have come before it, Claire’s has commenced its restructuring process from a position of unique operational strength,” Claire’s stated in the filing announcement
Claire’s has been struggling with a heavy debt load that left it with fewer options in dealing with online competition.
The company pointed to strong earnings minus debt costs and ear piercing services that are not affected by online competition.
The company announced no store closings. Typically retailers use the Chapter 11 filing to announce closings.
The company reported its restructuring efforts are supported the vast majority of its debt-holders.
Members of an Ad 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.
With these commitments in place, Claire’s expects to complete the chapter 11 process in September 2018, emerge with over $150 million of liquidity, and reduce its overall indebtedness by approximately $1.9 billion.
Court documents and additional information are available on the website administered by the Company’s claims and noticing agent, Prime Clerk LLC.
