For my generation, no middle school trip to the mall was complete without a visit to Claire’s to pick up some jewelry, gifts, or maybe even get your ears pierced. In fact, Claire’s says it has pierced more than 100 million ears around the world! Last week, the company became the last retailer to file for Chapter 11 bankruptcy.
The Financial State of Claire’s
Claire’s held $2.1 billion in debt at the close of 2017, and is seeking to reduce its debt by $1.9 billion through the bankruptcy. The company earned $29 million in profit and $1.3 billion in revenue last year. Claire’s plans to continue the operation of its 1600 Icing and Claire’s stores during the bankruptcy process, and says that it is far healthier financially than other retailers who have filed for bankruptcy.
The company did acknowledge that like so many of the other retailers who sought bankruptcy protection over the last few years, declining mall traffic had a lot to do with its financial troubles. However, Claire’s is hoping that its transition will go a little better than other companies’ such as Toys R Us. Claire’s ear piercing business is a substantial part of its revenue, and it is a service that must be done in person. It is something that will force consumers to come to the store in person, and hopefully make other purchases while they are there.
Moving Forward through Bankruptcy
Chief Executive of Claire’s, Rob Marshall, stated, “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.” Here at Bond & Botes, we have the same goal for our clients as they complete their bankruptcy process: to have a healthier, stronger financial life.
If you are like the many retailers who are in financial distress and need relief from your debt, please contact one of our offices today to set up a free consultation with one of our experienced attorneys.