Bankrupt 64-year-old retail chain faces millions in unpaid debt

Managing a concern is challenging, adjacent successful the champion circumstances. In today's uncertain economy, marked by slowing user spending and shifting retail habits, it becomes adjacent tougher.

For 1 retail chain, the trouble has been compounded by years of fiscal strain, 2 Chapter 11 bankruptcies, and hundreds of store closures nationwide.

Once an iconic promenade staple known for its affordable jewelry, colorful hairsbreadth accessories, and quirky novelties, Claire's is again facing superior fiscal setbacks. A caller revelation has raised doubts astir the semipermanent endurance of the 64-year-old brand, which erstwhile played a important relation successful the lives of countless teens and tweens.

As it works to look from its 2nd bankruptcy nether caller ownership by the backstage equity steadfast Ames Watson, Claire's is confronting further pressures from its proviso chain. Several Asian suppliers allege they are owed millions of dollars successful unpaid debts, according to claims filed successful Hong Kong and reported by CNBC.

The disputed orders were for vacation merchandise placed earlier Claire's 2nd bankruptcy filing, erstwhile Elliott Management inactive owned the company. Suppliers were reportedly alert of the retailer's fiscal instability astatine the clip the orders were made. However, by the clip accumulation was completed, Claire's had already filed for bankruptcy.

After Ames Watson acquired the brand, immoderate suppliers claimed they were inactive owed payment, but agreed to proceed doing concern with Claire's. Others chose to prosecute ineligible enactment against Claire's Hong Kong-based sourcing office, RSI International.

As a large American retail chain, Claire's is simply a salient lawsuit for galore of these Asian suppliers. This is why, contempt outstanding balances, respective vendors continued to fulfill orders retired of fearfulness that refusing to bash truthful could jeopardize their concern narration with the retailer.

During its latest acquisition process, RSI International notified creditors that they had 30 days to record claims to retrieve unpaid debts, liabilities that nether Hong Kong Law bash not transportation to caller owners.

In a connection to CNBC, Ames Watson emphasized it was "not progressive successful the cognition oregon purchasing decisions made anterior to the acquisition."

"Since then, we person focused connected responsibly stewarding the concern and engaging suppliers successful bully religion arsenic we fortify Claire's for the agelong term," said Ames Watson. "We are excited astir the company’s absorption successful 2026."

Claire's archetypal filed for Chapter 11 bankruptcy successful 2018, emerging aboriginal that twelvemonth nether the caller ownership of Elliott Management Corp. and Monarch Alternative Capital.