Claire’s Accessories has filed for bankruptcy in the US in a bid to reduce its debt by US$1.9bn.
The pre-teen retailer expects to complete the bankruptcy procedure in September, in which it will have $150m in cash and be able to bring its debt down significantly.
The company does not expect the proceedings to impact its international stores.
“This transaction substantially reduces the debt on our balance sheet and will enhance our efforts to provide the best possible experience for our customers,” said Ron Marshall, Claire’s CEO.
“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.”
Despite the bankruptcy announcement, the company expects its concessions business to grow by more than 4,000 stores in 2018.
In December, Claire’s suffered an asbestos contamination scare after nine of its make-up kits were recalled.
The recall was made after Kristiana Warner, from Providence, asked Sean Fitzgerald, the Director of Research and Analytical Services for North Carolina laboratory Scientific Analytical Institute (SAI), to test one of her daughter's make-up kits from Claire's.
However, Claire’s confirmed that the beauty products were safe to use.
