Published: Sat, March 10, 2018
Business | By Kate Woods

Claire's Accessories Reportedly Plans To File For Bankruptcy

Claire's Accessories Reportedly Plans To File For Bankruptcy

Claire's Accessories is reportedly preparing to file for bankruptcy in the USA as it deals with £1.4 billion worth of debt.

A bill is due next year and the company faces paying $60 million (£43 million) interest payment on March 13.

If Claire's chooses to file for Chapter 11 bankruptcy, the company will still be able to operate while restructuring its debt.

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Claire's downfall has been linked to increased competition with online retailers, which has been the end of a few stores recently thanks to the decrease in foot traffic in stores.

Teen accessories retailer Claire's, is now $2 billion in debt and is planning to transfer ownership from Apollo Global Management LLC to a group of lenders in the coming months.

Claire's has reached agreements with the CVS drugstore chain and supermarket operator Giant Eagle to put some of its outlets on the premises of the drugstores and supermarkets, where the number of potential customers may be greater than the number at shopping malls.

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Claire's operates in 47 countries worldwide and has 4,220 locations - with many shops being franchises.

Apollo bought Claire's back in 2007 and added around 350 stores between 2010 and 2013.

Greg Portell, lead partner of the retail practice at the A.T. Kearney consulting firm, told Bloomberg that Claire's is capable of profitable operations but "they can't service their debt".

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