Claire's, ear piercing and accessory chain store, files for bankruptcy protection

The girls' accessories chain said Monday it's filing for Chapter 11 protection to lower its debt by almost two-billion dollars. The company, which has been piercing ears since 1978, sells its products in more than 7,500 locations around the world.

However, in court filings and a company release today, Claire's sought to distinguish itself from peers that have taken the bankruptcy route, stating that it is "utilizing the Chapter 11 process to effectuate a balance sheet - not an operational - restructuring". The company filed Chapter 11 bankruptcy in September and originally planned to close only about one-fifth of its store locations. It said it can compete with the shift to online shopping, arguing that its "iconic ear piercing services are unmatched and cannot be replicated online". It expects to report net sales of more than $1.3 billion and net income of $29 million for fiscal year 2017.

In the Lehigh Valley, the chain operates stores inside the Lehigh Valley Mall, South Mall, Promenade Shops at Saucon Valley and Palmer Park Mall.

Earlier this month, news broke that the company was looking to relinquish control to various creditors. It has pierced more than 100 million ears worldwide.

Claire's, which specialises in ear piercing, fashion jewellery and accessories for young women, is the latest USA retailer to run into trouble. The ad hoc group of first lien lenders will provide the company with about $575 million of new capital, including a $250 million first lien term loan.

Claire's says that it has also secured a new $135 million in debtor-in-possession financing commitments from Citigroup Global Markets Inc.