Claire’s needs school year to avoid bankruptcy

Several sources indicate teenage chain Claire’s needs a healthy start of the school year, to avoid major difficulties. If it fails to generate a substantial amount of turnover in the next few months, it may go bankrupt.

Very high debt

The start of the school year is traditionally a very busy period for the chain, with only the holiday periods doing better turnover-wise. This time around, it will definitely need to perform well, because Claire’s needs money to pay off its debts.

Currently, the company has 2.4 billion dollars (2.2 billion euro) in debt, which is why any profit immediately evaporates. The chain expects a 72 million dollar (65 million euro) profit in the first half of the year, but at the same time, it needs to pay off 110 million dollars (99 million euro) in interests. 

Claire’s, founded in 1961, has about 3,500 stores worldwide. Investment firm Apollo Global Management acquired it in 2007 for 3.1 billion dollars (2.8 billion euro), but the company’s debt grew a lot since then.