Claire's to emerge from bankruptcy in October
Accessories retailer Claire’s Stores, Inc. received approval from the US Bankruptcy Court on Friday for its Third Amended Plan of Reorganization, putting the tween favorite on course to exit Chapter 11 bankruptcy in early October.
The plan which will see Claire’s eliminate $1.9 billion of debt and gain access to $575 million of additional capital, is supported by all of the company’s major creditor groups and has been sponsored by an ad hoc group of first-lien creditors, led by Elliott Management Corporation and Monarch Alternative Capital LP.
The news comes around a month after Oaktree Capital Management, the largest holder of the company’s second-lien debt, was accused of breaking creditor agreements by continuously contesting the Claire’s restructuring plan and opposing the retailer's attempts to exit bankruptcy in September.
Claire’s CEO Ron Marshall is optimistic about the future of the company, saying in a press release, “We have already seen year-over-year growth in same-store sales and are gaining significant traction in our newer concessions business.”
“Our strengthened balance sheet will allow us to further the initiatives already underway, enhance our customer experience, and continue our positive growth trajectory,” he continued.
In the second quarter of 2018, the company reported a reduced net loss of $3.29 million, compared to the loss of $20.49 million reported in the prior-year period.
Claire’s has carried on business as usual in its retail stores since it made its Chapter 11 filing on March 19 and intends to continue doing so during the remainder of the bankruptcy process.
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