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Heartbreaking News: Goodbye Claire’s? A Big Blow Of Bankruptcy
Accessories chain Claire’s is filling for bankruptcy and we do not know how to react. Debt, a decline in mall traffic and online competition are just some of the things that have marred the future of Claire’s.
If you’ve loved Claire’s here is a news that is sure to break your heart as you read this post. Claire’s is headed to bankruptcy due to a whopping $2 billion in debt. However, filing a Chapter 11 bankruptcy could give Claire’s a final chance to keep the business operating as usual. We can hardly believe this heart (piercing) news as executives strive to figure out a long-term comeback plan for the once retail giant. While the doors to Claire’s are not shutting just yet – things aren’t looking too bright for this tween retailer. A staggering drop in popularity and the constant battle to keep up with online websites has come as a big blow for Claire’s.
While it is still struggling to make ends meet on the business front, inside executives are keen on closing a deal which could very well ease off the $2 billion debt load. At the moment, the debt load is more than 10 times with a $60 million interest payment that is due on March 13.
Between 2010 – 2013 after Apollo Global Management LLC took over the company, about 350 stores, and 2,700 stores were opened globally but the company continued to struggle and remain profitable. In the light of the events early on in 2017, Claire’s went to withdraw its initial public offering registration.
One of the key reasons is the decline in traffic to malls, especially where the stores are located. A long list of retailers such as Limited Too and Wet Seal have faced similar fate before vanishing from the retail forefront altogether. In 2017, more than 50 US retailers filed for bankruptcy --- highest rate since the recession. This could very well result in a hike of the shutdown of malls in the next five years. Once a dreamlike retail store famous for having pierced thousands of ears all around the world is now a debt-ridden retail company. So far, there is no news of store closure but it doesn’t take away from the fact that a rocky road lies ahead for Claire’s.
Claire’s was a huge part of people’s childhood, for now, it is hanging in there and may just find a newer way to keep the doors open. However, should they take the exit route, the only memory of Claire’s will be the holes they’ve pierced over the years and around the world.
