Teen favorite Claire's files for Chapter 11 in Delaware

Teen favorite Claire's files for Chapter 11 in Delaware

Claire's joins a long line of retailers that have filed for bankruptcy, including Toys "R" Us, Payless Shoes, Gymboree, Rue21, The Limited and RadioShack.

Claire's Stores, Inc. announced Monday that it has filed for Chapter 11 bankruptcy protection.

Claire's agreed to a restructuring plan with a group of creditors led by Elliott Managementand Monarch Alternative Capital, according to a statement Monday.

The company expects to add 4,000 stores in 2018 and keep more than 1,600 Claire's and Icing U.S. locations operating.

Claire's is owned by private equity firm Apollo Global Management, which paid 3.1 billion USA dollars for the company in 2007.

The retail chain said it was entering the restructuring process from "a position of unique operational strength".

"This transaction substantially reduces the debt on our balance sheet and will enhance our efforts to provide the best possible experience for our customers", Ron Marshall, Claire's CEO, said in a news release.

Claire's has been struggling with a heavy debt load that left it with fewer options in dealing with online competition.

The retailer's global subsidiaries are not part of the U.S. bankruptcy filings, Claire's said in a statement.

The company, which has been piercing ears since 1978, sells its products in more than 7,500 locations around the world.

"The Company's iconic ear piercing services are unmatched and can not be replicated online", Marshall said. The company also had too much debt, costing it $183 million a year alone in interest payments, he said. Worldwide subsidiaries of Claire's are not part of the USA filings.

Related Articles