Claire’s Accessories has filed for bankruptcy protection in the U.S, in a bid to restructure its debts.
Filing for bankruptcy will allow the retailer to reduce its debt by about $1.9 billion. They anticipate the process to be completed by September.
In addition, Claire’s has reached an agreement with creditors including Elliott Management Corp and Monarch Alternative Capital LP, which will provide the company with $575 million in new capital.
Ron Marshall, Claire’s chief executive, commented on the move: “This transaction substantially reduces the debt on our balance sheet and will enhance our efforts to provide the best possible experience for our customers.
“We will complete this process as a healthier, more profitable company, which will position us to be an even stronger business partner for our suppliers, concessions, partners and franchisees.”
The retail chain, which is known for its jewelry accessories and ear-piercing services, is owned by Apollo Global Management (NYSE:APO). The private equity firm acquired Claire’s back in 2007 for $3.1 billion.
The Hoffman Estates, Illinois based retailer’s international subsidiaries are included in the the U.S. bankruptcy filings, Claire’s statement added.
Claire’s Accessories, alongside other retailers have been facing the challenge from the decline in mall footfall in recent years, as shoppers increasingly turn to online platforms.
The accessories retailer has over 3,000 stores in 34 countries. Nevertheless, Claire’s does not anticipate that this will affect operations in the U.K and across Europe.
Back in 2016, the company reported a growth in sales of 4.4 per cent to £127 million, at its UK locations.
Nevertheless, retailers on the UK high street remain cautious in light of an increasingly difficult trading environment and political uncertainty.
Last month, both Toys R Us and Maplins fell into administration amid falling sales and after having amassed high debts.
Restaurants across the country are also feeling the consumer pinch, with revenues down for both Restaurant Group and Casual Dining Group.