(Reuters) – Claire’s Stores Inc said on Monday it filed for Chapter 11 bankruptcy protection and expects to reduce debt by about $1.9 billion, as the struggling retailer of girls’ accessories combats a fall in mall traffic.
Claire’s said it reached an agreement with creditors including Elliott Management Corp and Monarch Alternative Capital LP, which will provide it with about $575 million in new capital.
Claire’s expects to complete the Chapter 11 process in September.
The retailer’s international subsidiaries are not part of the U.S. bankruptcy filings, Claire’s said in a statement.
Claire’s is owned by private equity firm Apollo Global Management LLC (APO.N), which acquired it in 2007 for $3.1 billion.