Claire's Stores has filed for Chapter 11 bankruptcy protection, the girls' accessories retailer said on Monday, as it succumbs to lower mall traffic like many of its peers.
Claire's expects to reduce debt by about $1.9 billion, and said it reached an agreement with creditors including Elliott Management and Monarch Alternative Capital, which will give the company some $575 million in new capital.
Claire's, which had over $1.3 billion in annual sales, joins several other U.S. retailers in bankruptcy as people increasingly shop online, shunning specialty brick-and-mortar stores.
Claire's has received a commitment of $135 million in debtor-in-possession financing from Citigroup and expects to complete the Chapter 11 process in September.
The Hoffman Estates, Illinois based retailer's international subsidiaries are not part of the U.S. bankruptcy filings, Claire's said in a statement.
Claire's is owned by private equity firm Apollo Global Management, which bought the company in 2007 for $3.1 billion.
Claire's, known for its affordable jewelry and ear-piercing services, filed its Chapter 11 petition in the U.S. bankruptcy court in Delaware