(Reuters) - U.S. girls’ accessories retailer Claire’s Stores Inc has hired investment bank Lazard Ltd (LAZ.N) to advise it on ways to address its debt burden, it told Reuters on Monday, as several brick-and-mortar store operators suffer from a drop in mall traffic.
Claire’s has been seeking to address its $2.2 billion debt load, which starts coming due next year. It comes two years after the retailer, which is famous for having pierced the ears of millions of American girls, completed an out-of-court debt restructuring and refinanced some of its debt.
“We believe this is the right time to undertake this initiative and we want to assure our vendors, employees and stakeholders that we believe we have ample liquidity to honour our commitments through the completion of this process,” Claire’s Chief Executive Ron Marshall said in a statement.
The company also said that its operations remain strong. It recorded same-store consolidated sales growth of 2.7 percent for the first three quarters of 2017.
More than 15 brick-and-mortar retailers including Toys “R” Us Inc, The Limited and Gymboree Corp filed for bankruptcy in 2017, as consumers turned more frequently to online shopping. Several that were owned by private equity firms were able to reorganize rather than wind down, bucking a trend in retail.
Claire’s sells its products in 4,220 locations in 45 countries, through company-owned stores, concessions and franchise locations. It is owned by private equity firm Apollo Global Management LLC (APO.N), which acquired it in 2007 for $3.1 billion.
(This version of the story corrects debt maturity coming due next year, not this year, in second paragraph)
Reporting by Jessica DiNapoli and Greg Roumeliotis in New York; Editing by Susan Thomas