US-based accessories retailer Claire’s is reportedly on the verge of collapse as it prepares to file for bankruptcy.
According to Bloomberg, the retailer is sitting on around $2 billion (£1.44 billion) worth of debt, more than 10 times a key measure of its annual earnings.
The move to file for bankruptcy comes ahead of a $60 million (£43.25 million) interest payment which is due on March 13.
A further $1.4 billion (£1.01 billion) of its debt is set to mature next year.
In the proposed deal control of the retailer, which trades from 4220 locations in 45 countries – including 378 stores and 123 concessions in the UK – ownership would be passed from its current proprietors Apollo Global Management to lenders.
It is understood that these lenders include Elliot Capital Management and Monarch Alternative Capital which specialises in distressed companies.
Vendor Capital Management and Diameter Capital Partners are also reportedly involved.
Though it is not yet clear how a bankruptcy filing in the US would affect the retailer’s UK stores, it follows a similar state of affairs at the recently-collapsed Toys R Us, whose US counterpart filed for bankruptcy ahead of the group falling into administration here in the UK.
Despite its financial turmoil, which led to it backing out of an IPO last year, Claire’s remains a favourite among teenage girls and is understood to pierce more than three million ears a year.