Jewelry retailer and ear-piercing specialist Claire’s Stores filed bankruptcy on Monday, saying it needs to restructure its debt-laden balance sheet while emphasizing that its core business remains strong.

The company pierced more than 3.5 million ears in 2017, reporting a net profit of $29 million. But sales have been pressured by declining mall traffic, falling from $1.5 billion in 2014 to $1.3 billion in 2017.

In bankruptcy court papers, Claire’s touted the resilience of its business model and plans for growth — including the addition of ear-piercing concessions in 4,000 stores this year — but said its over-leveraged balance sheet was no longer sustainable over the long term.

Claire’s has about $1.9 billion in funded debt, much of it resulting from a $3.1 billion buyout led by private-equity firm Apollo Management in 2007. The Chapter 11 petition filed Monday was accompanied by a restructuring agreement with creditors that will reduce Claire’s overall indebtedness by about $1.9 billion.

“We will complete this process as a healthier, more profitable company, which will position us to be an even stronger business partner for our suppliers, concessions partners, and franchisees,” Claire’s CEO Ron Marshall said in a news release.

The company started out in 1961 as a wig seller under the name Fashion Tress Industries, acquiring 25-store jewelry chain Claire’s Boutiques in 1973 and then changing its name to Claire’s Stores.

In 2016, it launched a debt-reduction plan and a leadership shakeup that involved a new CEO, new chief financial officer, new chief merchandising officer, and new executive vice president.

CFO Scott Huckins said Monday in court papers that while Claire’s has generated strong revenue performance and operating margins, it is “burdened by a substantial debt load, in addition to facing many of the same pressures affecting U.S. retailers more generally.”

“Over the last three years, the debtors’ cash interest expense has averaged approximately $183 million per year,” he noted. “The costs of such debt service has, of course, impacted the debtors’ ability to refresh store locations, drive product and growth initiatives, and further enhance their customer experience.”

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