Claire’s Files for Bankruptcy Protection

Claire’s Stores (Hoffman Estates, Ill.) has filed for Chapter 11 bankruptcy protection amid lower mall traffic and an overall decline in sales.

In the agreement it has reached with its creditors Elliott Management (New York) and Monarch Alternative Capital (New York), the company will have $575 million in new capital, reports CNBC, and it has received a commitment of $135 million in debtor-in-possession financing from Citigroup (New York). It expects to reduce its debt by roughly $1.9 billion. Its subsidiaries were not part of the filings, the company says.

Claire’s had more than $1.3 billion in annual sales last year and is owned by New York-based private equity firm Apollo Global Management, which purchased it in 2007 for $3.1 billion. The Chapter 11 process is expected to be complete in September.