In Louisiana and across the country, it can be a struggle for business owners to stay afloat in the midst of a serious financial crisis. For retail stores like Claire’s, the challenge is great because brick and mortar stores are now forced to compete with online shopping sites. Claire’s sells jewelry, cosmetics and accessories, especially targeted at a teenage and preteen consumer market. The company recently announced new debt relief plans that it hopes will help keep the doors open.
A public statement issued by Claire’s says its international affiliates are not part of its current Chapter 11 bankruptcy. This type of bankruptcy provides financial relief by implementing a restructured payment plan. Those paying back debts are often able to retain ownership of their assets as opposed to a Chapter 7 bankruptcy that typically includes complete asset liquidation.
Claire’s financial problems have a lot to do with trying to compete with larger retailers, especially those with similar product lines. Through a Chapter 11 plan, the store would be given a specified period of time to reorganize its assets and payment structure according to a court-approved plan. In the meantime, it would be protected against creditor litigation.
Retail store owners experiencing heavy debt burdens often benefit from Chapter 11 bankruptcy. When a business owner proposes a restructured payment plan, the court must approve it before it takes effect. It is not the only type of debt relief option, however, and business owners may explore all options available to find solutions that best fit their needs. An experienced Louisiana debt relief attorney can assist anyone in this state looking to overcome financial difficulties once and for all.
Source: 247wallst.com, “Claire’s Stores Declares Bankruptcy“, Douglas A.McIntyre, March 19, 2018
