Add another name to the list of bankrupt retail chains.
Claire’s has announced it is pursuing Chapter 11 financial restructuring from a position of "operational strength" in order to "effectuate a balance sheet—not an operational—restructuring."
Doing business under the brand names of Claire's and Icing, the company is seeking Chapter 11 "in order to eliminate a substantial portion of debt" and position the company as one of the world's leading jewelry stores for young women.
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.
“This transaction substantially reduces the debt on our balance sheet and will enhance our efforts to provide the best possible experience for our customers,” said CEO Ron Marshall. “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 company's international subsidiaries are not part of the restructuring.
"Claire's is actually growing, not shrinking, its business," the company said in a statement. It expects to report net sales of more than $1.3 billion and net income of $29 million for fiscal year 2017. 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.
"The company’s iconic ear piercing services are unmatched and cannot be replicated online," the company said.
Claire’s said it expects to operate its 7,500 locations in 45 countries as usual during restructuring. There are four local Claire's locations: at the Boulevard Mall, Eastern Hills Mall, McKinley Mall and Walden Galleria. Icing stores are also located at the McKinley Mall and Walden Galleria.