Claire’s Stores, the mall staple that specializes in teen jewelry and accessories, is planning to file for Chapter 11 in the coming weeks, according to a report in Bloomberg that quoted unnamed sources.
The company could not be reached for comment at press time.
According to the report, the mall chain is working out a deal whereby Apollo Global Management, which has owned the company for the past 11 years, would cede control to the company’s lenders, Elliott Capital Management and Monarch Alternative Capital. Two other lenders—Venor Capital Management and Diameter Capital Partners—are also said to be involved in the reorganization plan, the news agency reported.
And while the retailer maintained in its latest press release that sales were strong—it reported that comps rose 3.2 percent in the first three quarters of the year—it has continued to be, as it admitted in an SEC filing, “significantly leveraged.” In December 2017, it estimated its debt load as $2.2 billion, in part sparked by its $3.1 billion buyout by Apollo.
In its 11 years of ownership, the investment firm expanded the costume jewelry retailer dramatically, from around 3,000 stores then to more than 4,220 now. In May 2013, it filed for an initial public offering, but last year it withdrew those plans to go public.
The company, which calls itself a “girl’s best friend” and claims to have pierced 100 million ears since 1979, currently operates in 45 countries around the world, under its two main brand names, Claire’s and Icing, according to a company statement. It was founded in 1973 by Rowland Schaefer, who bought the then-25-store chain Claire’s Boutiques when his woman’s wig business started stalling.
(Top: Claire’s store in Michigan; image courtesy of Wikipedia)