Mall Stores Are Dying - Why Claire's Says Its Bankruptcy Will Be Different

Credit Walden Galleria

The retailer and its affiliates filed for Chapter 11 bankruptcy Monday and hope to reorganize and reduce its debt load by about $1.9 billion.

Unlike other retailers that have come before it, Claire's has commenced its restructuring process from a position of unique operational strength.

Accories store Claire's has filed for Chapter 11 bankruptcy protection.

Anchorage is home to three different Claire's stores; one is located in the Dimond Mall, one is located in the 5th Avenue Mall, and one is located in the Northway Mall. The company began piercing ears in 1978.

In the Lehigh Valley, the chain operates stores inside the Lehigh Valley Mall, South Mall, Promenade Shops at Saucon Valley and Palmer Park Mall. And the firm said that mall traffic declined 8 percent in the past year.

Claire's describes itself as the world's leading ear piercer and pointed out in the news release that the service can't be replicated online.

In an effort to bounce back, Claire's has not announced any store closures.

It's just the latest retailer to seek bankruptcy protection, close stores or go out of business entirely.

Claire's said on Monday that it has obtained $135 million in debtor-in-possession financing commitments, including an asset-based lending facility and a term loan from Citigroup.

Clair's announced it has an agreement with an ad hoc group of first-lien creditors that will provide the company with $575 million in new capital via Elliott Management Corp. and Monarch Alternative Capital LP. The company says that it plans to emerge from Chapter 11 in September with $150 million of liquidity.

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