Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 9, 2017

 

 

CLAIRE’S STORES, INC.

(Exact name of registrant as specified in its charter)

 

 

Florida

(State or other jurisdiction of incorporation)

 

1-8899, 333-148108, 333-175171   59-0940416

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

2400 West Central Road, Hoffman Estates, Illinois 60192

(Address of principal executive offices)

Registrant’s telephone number, including area code: (847) 765-1100

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 7.01 Regulation FD Disclosures

Claire’s Stores, Inc. (the “Company”) is furnishing schedules containing certain supplemental financial information as of and for the three month ended April, 29 2017 respecting (i) the Company and its subsidiaries (excluding CLSIP Holdings LLC and CLSIP LLC, which have been designated as “unrestricted subsidiaries” under the Company’s debt agreements), (ii) Claire’s (Gibraltar) Holdings Limited and its subsidiaries, and (iii) CLSIP Holdings LLC and CLSIP LLC that has been provided to lenders of these entities under existing credit agreements.

The information furnished pursuant to this Item 7.01 and the attached exhibit shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits

 

  (d) Exhibits

 

Exhibit 99.1    Schedules of Supplemental Financial Information as of April 29, 2017

 

2


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    CLAIRE’S STORES, INC.
Date: June 9, 2017     By:  

/s/ Scott Huckins

      Name:   Scott Huckins
      Title:   Chief Financial Officer

 

3


EXHIBIT INDEX

 

Exhibit 99.1    Schedules of Supplemental Financial Information as of April 29, 2017

 

4

Press Release

EXHIBIT 99.1

CLAIRE’S STORES, INC. AND SUBSIDIARIES

(EXCLUDING UNRESTRICTED SUBSIDIARIES)

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

(in thousands)

 

     April 29, 2017  

ASSETS

  

Current assets:

  

Cash and cash equivalents

   $ 25,237  

Inventories

     140,938  

Prepaid expenses

     16,924  

Other current assets

     26,809  
  

 

 

 

Total current assets

     209,908  
  

 

 

 

Property and equipment:

  

Furniture, fixtures and equipment

     220,369  

Leasehold improvements

     297,681  
  

 

 

 
     518,050  

Accumulated depreciation and amortization

     (389,476
  

 

 

 
     128,574  
  

 

 

 

Leased property under capital lease:

  

Land and building

     18,055  

Accumulated depreciation and amortization

     (6,539
  

 

 

 
     11,516  
  

 

 

 

Goodwill

     1,132,575  

Intangible assets, net of accumulated amortization

     304,797  

Other assets

     41,052  
  

 

 

 
     1,478,424  
  

 

 

 

Total assets

   $ 1,828,422  
  

 

 

 

LIABILITIES AND STOCKHOLDER’S DEFICIT

  

Current liabilities:

  

Trade accounts payable

   $ 69,726  

Income taxes payable

     5,353  

Accrued interest payable

     24,003  

Accrued expenses and other current liabilities

     78,351  
  

 

 

 

Total current liabilities

     177,433  
  

 

 

 

Intercompany payables

     81,487  

Long-term debt, net

     1,968,280  

Revolving credit facility, net

     57,043  

Obligation under capital lease

     16,289  

Deferred tax liability

     91,900  

Deferred rent expense

     33,917  

Unfavorable lease obligations and other long-term liabilities

     8,800  
  

 

 

 
     2,257,716  
  

 

 

 

Commitments and contingencies

  

Stockholder’s deficit:

  

Common stock

     —    

Additional paid-in capital

     545,924  

Accumulated other comprehensive loss, net of tax

     (49,956

Accumulated deficit

     (1,102,695
  

 

 

 
     (606,727
  

 

 

 

Total liabilities and stockholder’s deficit

   $ 1,828,422  
  

 

 

 

 

1


CLAIRE’S STORES, INC. AND SUBSIDIARIES

(EXCLUDING UNRESTRICTED SUBSIDIARIES)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT

OF OPERATIONS

(in thousands)

 

     Three Months  
     Ended  
     April 29, 2017  

Net sales

   $ 299,621  

Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below)

     151,788  
  

 

 

 

Gross profit

     147,833  
  

 

 

 

Other expenses:

  

Selling, general and administrative

     110,512  

Depreciation and amortization

     11,203  

Severance and transaction-related costs

     143  

Other income, net

     (2,701
  

 

 

 
     119,157  
  

 

 

 

Operating income

     28,676  

Interest expense, net

     43,580  
  

 

 

 

Loss before income tax benefit

     (14,904

Income tax benefit

     (8,146
  

 

 

 

Net loss

   $ (6,758
  

 

 

 

 

2


CLAIRE’S STORES, INC. AND SUBSIDIARIES

(EXCLUDING UNRESTRICTED SUBSIDIARIES)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(in thousands)

 

     Three Months  
     Ended  
     April 29, 2017  

Cash flows from operating activities:

  

Net loss

   $ (6,758

Adjustments to reconcile net loss to net cash used in operating activities:

  

Depreciation and amortization

     11,203  

Amortization of lease rights and other assets

     1,069  

Amortization of debt issuance costs

     2,187  

Accretion of debt premium

     (721

Net unfavorable accretion of lease obligations

     (64

Loss on sale/retirement of property and equipment, net

     118  

Stock-based compensation expense

     62  

(Increase) decrease in:

  

Inventories

     (9,694

Prepaid expenses

     (1,371

Other assets

     (1,434

Increase (decrease) in:

  

Trade accounts payable

     (1,069

Income taxes payable

     (962

Accrued interest payable

     (29,263

Accrued expenses and other liabilities

     (10,834

Deferred income taxes

     (7,597

Deferred rent expense

     (525
  

 

 

 

Net cash used in operating activities

     (55,653
  

 

 

 

Cash flows from investing activities:

  

Acquisition of property and equipment

     (3,365

Acquisition of intangible assets/lease rights

     (28
  

 

 

 

Net cash used in investing activities

     (3,393
  

 

 

 

Cash flows from financing activities:

  

Proceeds from revolving credit facilities

     69,000  

Payments on revolving credit facilities

     (16,200

Payments on short-term debt

     (18,420

Payments on long-term debt

     (1,857

Payment of debt issuance costs

     (347

Principal payments of capital lease

     (76
  

 

 

 

Net cash provided by financing activities

     29,185  
  

 

 

 

Effect of foreign currency exchange rate changes on cash and cash equivalents

     (694
  

 

 

 

Net decrease in cash and cash equivalents

     (30,555

Cash and cash equivalents, at beginning of period

     55,792  
  

 

 

 

Cash and cash equivalents, at end of period

   $ 25,237  
  

 

 

 

 

3


Claire’s (Gibraltar) Holdings Limited

Unaudited Condensed Consolidated Balance Sheet

(in thousands)

 

     April 29, 2017  

ASSETS

  

Current assets:

  

Cash and cash equivalents

   $ 17,591  

Inventories

     56,846  

Prepaid expenses

     13,119  

Other current assets

     10,850  
  

 

 

 

Total current assets

     98,406  
  

 

 

 

Property and equipment:

  

Furniture, fixtures and equipment

     67,936  

Leasehold improvements

     98,955  
  

 

 

 
     166,891  

Accumulated depreciation and amortization

     (120,289
  

 

 

 
     46,602  
  

 

 

 

Intercompany receivables

     136,410  

Goodwill

     145,058  

Intangible assets, net

     201,120  

Other assets

     36,352  
  

 

 

 
     518,940  
  

 

 

 

Total assets

   $ 663,948  
  

 

 

 

LIABILITIES AND STOCKHOLDER’S EQUITY

  

Current liabilities:

  

Trade accounts payable

   $ 44,944  

Income taxes payable

     3,735  

Accrued interest payable

     681  

Accrued expenses and other current liabilities

     32,969  
  

 

 

 

Total current liabilities

     82,329  
  

 

 

 

Long-term debt, net

     155,971  

Deferred rent expense

     9,146  
  

 

 

 
     165,117  
  

 

 

 

Stockholder’s equity:

  

Common stock

     2  

Additional paid in capital

     770,857  

Accumulated other comprehensive loss, net of tax

     (49,192

Accumulated deficit

     (305,165
  

 

 

 
     416,502  
  

 

 

 

Total liabilities and stockholder’s equity

   $ 663,948  
  

 

 

 

 

4


Claire’s (Gibraltar) Holdings Limited

Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income

(in thousands)

 

     Three Months  
     Ended  
     April 29, 2017  

Net sales

   $ 103,661  

Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below)

     54,277  
  

 

 

 

Gross profit

     49,384  
  

 

 

 

Other expenses:

  

Selling, general and administrative

     43,306  

Depreciation and amortization

     4,113  

Severance and transaction-related costs

     84  

Other income

     (1,417
  

 

 

 
     46,086  
  

 

 

 

Operating income

     3,298  

Interest expense, net

     2,782  
  

 

 

 

Income before income tax benefit

     516  

Income tax benefit

     (7,188
  

 

 

 

Net income

     7,704  

Foreign currency translation adjustments

     484  

Net gain on intra-entity foreign currency transactions, net of tax

     2,737  
  

 

 

 

Other comprehensive income

     3,221  
  

 

 

 

Comprehensive income

   $ 10,925  
  

 

 

 

 

5


CLSIP Holdings LLC

Unaudited Condensed Statement of Cash Flows

(in thousands)

 

     Three Months  
     Ended  
     April 29, 2017  

Net cash provided by operating activities

   $ —    

Net cash provided by investing activities

     —    

Net cash provided by financing activities

     —    
  

 

 

 

Net increase in cash and cash equivalents

     —    

Cash and cash equivalents, at beginning of period

     —    
  

 

 

 

Cash and cash equivalents, at end of period

   $ —    
  

 

 

 

CLSIP LLC

Unaudited Condensed Statement of Cash Flows

(in thousands)

 

     Three Months  
     Ended  
     April 29, 2017  

Net cash provided by operating activities

   $ —    

Net cash provided by investing activities

     —    

Payments on long-term debt

     (2,415

Intercompany activity, net

     2,915  
  

 

 

 

Net cash provided by financing activities

     500  
  

 

 

 

Net increase in cash and cash equivalents

     500  

Cash and cash equivalents, at beginning of period

     —    
  

 

 

 

Cash and cash equivalents, at end of period

   $ 500  
  

 

 

 

 

6