Claire's, the ear-piercing mall chain, files for bankruptcy

Claire's, the ear-piercing mall chain, files for bankruptcy

Claire's jewelry chain and hub for ear piercings at malls across the country has filed for chapter 11 bankruptcy.

Chief Executive Officer Ron Marshall has been trying to revive Claire's North American operations, under pressure as shoppers shun the malls where the company has many of its 7,500 total locations. It employs approximately 10,000 people.

Privately-held Claire's says it expects to emerge from bankruptcy in September.

According to Claire's, it has a majority approval of from its Ad Hoc Group of First Lien Creditors led by Elliott Management Corporation and Monarch Alternative Capital LP.

It will see lenders including Elliott Management and Monarch Alternative Capital inject 575 million United States dollars of fresh cash into the group. "We will complete this process as a healthier, more profitable company". Gross profit percentage increased 200 basis points to 48.5 percent during the fiscal 2017 third quarter compared to 46.5 percent for the prior year's quarter.

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Claire's is another casualty of a string of private value buyouts orchestrated by outside investors who stacked up on obligation about 10 years prior, saddling retailers with burdensome payments. 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.

He said the costs of servicing that debt has "impacted the Debtors' ability to refresh store locations, drive product and growth initiatives, and further enhance their customer experience".

Claire's blames plunging shopper traffic to malls for its decline. The company was founded in the 1960s.

The jewelry chain Claire's filed for bankruptcy on Monday.

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