Running a business is challenging, even under the best of circumstances. In today’s uncertain economy, marked by slowing consumer spending and changing retail habits, it becomes even tougher.
For a retail chain, the difficulty has been compounded by years of financial strain, two Chapter 11 bankruptcies and hundreds of store closings nationwide.
Once an iconic mall known for its affordable jewelry, colorful hair accessories, and quirky novelties, Claire’s is once again struggling financially. A new revelation has cast doubt on the long-term survival of the 64-year-old brand, which once played a significant role in the lives of countless teens and tweens.
As it works to emerge from its second bankruptcy under new ownership by private equity firm Ames Watson, Claire’s faces additional pressure from its supply chain. Several Asian suppliers claim they are owed millions of dollars in unpaid debts, according to filings in Hong Kong and reported by CNBC.
The disputed orders were for holiday merchandise placed before Claire’s second bankruptcy filing, when Elliott Management still owned the company. The suppliers were aware of the retailer’s financial instability at the time the orders were placed. However, by the time production was completed, Claire’s had already filed for bankruptcy.
After Ames Watson acquired the brand, some suppliers claimed they were still owed payment but agreed to continue doing business with Claire’s. Others chose to take legal action against Claire’s Hong Kong sourcing office, RSI International.
As a major American retail chain, Claire’s is a prominent customer for many of these Asian suppliers. This is why, despite outstanding balances, several sellers continued to honor orders for fear that refusing to do so could jeopardize their business relationship with the retailer.
During the most recent acquisition process, RSI International notified creditors that they had 30 days to file claims for the recovery of unpaid debts, liabilities which, under Hong Kong Law, do not transfer to new owners.
In a statement to CNBC, Ames Watson emphasized that it “was not involved in the operations or purchase decisions made prior to the acquisition.”
“Since then, we have focused on managing the business responsibly and hiring suppliers in good faith while strengthening Claire’s for the long term,” said Ames Watson. “We are excited about the direction of the company in 2026.”
Against the backdrop of bankruptcy restructuring, Claire is faced with Asian suppliersunpaid debt claims.Shutterstock” loading=”eager” height=”540″ width=”960″ class=”yf-lglytj loader”/>
Against the backdrop of bankruptcy restructuring, Claire’s faces Asian suppliers‘ unpaid debt claims.Shutterstock
Claire’s first filed for Chapter 11 bankruptcy in 2018, emerging later that year under new ownership by Elliott Management Corp. and Monarch Alternative Capital.
However, due to continued changes in retail trends, increased competition, slower consumer spending, and the continued growth of online shopping, the initial restructuring process was not enough to prevent Claire’s from accumulating more debt.
In August 2025, Claire’s filed for Chapter 11 bankruptcy for the second time, reporting assets and liabilities estimated between $1 billion and $10 billion.
At the time of filing, the retailer operated more than 2,750 stores in 17 countries, with approximately 1,350 locations in the U.S., including Icing stores and Walmart shop-in-shops.
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Following its second bankruptcy, Claire’s was acquired in September 2025 by Ames Watson in a nearly $140 million deal that included up to 950 stores. The firm assumed a significant portion of the retailer’s debt, including seller and owner debt, cure costs and the continued employment of its staff, while providing $36 million in seller financing.
The acquisition appeared to halt mass store closures and allowed Claire’s to continue liquidation sales at select North American locations. At the time, the deal was seen as a turning point, with the retailer saying the move would help “the Claire’s brand remain a prominent retailer for tweens, tweens and young girls around the world”.
Despite the new ownership, a total of 291 stores were ultimately slated for closure, raising questions about the future of Claire’s North American footprint.
Holiday retail sales in November and December are expected to increase between 3.7% and 4.2% year over year, topping $1 trillion, according to the National Retail Federation (NRF).
Over the past five years, holiday spending has accounted for about 19% of total annual retail sales, primarily because higher sales volumes typically come without a significant increase in fixed operating costs.
Even amid ongoing economic uncertainty and rising inflation, consumers plan to spend an average of $890.49 per person this holiday season, the second highest on record.
“The economy continued to demonstrate surprising resilience in a year marked by trade uncertainty and persistent inflation,” said NRF Chief Economist Mark Mathews. “As the tariffs have induced an increase in consumer prices, retailers have tried to maintain a cap on prices given the uncertainty over trade policies.”
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While strong holiday sales may provide short-term relief, Claire’s long-term recovery remains uncertain. Strained relationships with suppliers threaten to disrupt the retailer’s supply chain, and new US tariffs implemented under President Donald Trump add another layer of complexity.
Although tariffs on imported Chinese goods were initially much higher, the US and China agreed to maintain a temporary 10 percent mutual tariff baseline until November 2026 as part of a truce. China also agreed to suspend its retaliatory tariffs starting in 2025.
“The latest one-year suspension is a positive sign. This supports our view that despite continued efforts to reduce risks, a lasting decoupling or trade embargo remains unlikely in the near term,” said JP Morgan economist Tingting Ge.
“Both sides have shown a willingness to compromise, but strategic competition will persist, with the possibility of further action and a potential escalation or de-escalation during the next ceasefire period.”
For Claire’s, the festive season may offer temporary relief, but unresolved supplier disputes, lingering debt and wider economic pressures continue to cloud the retailer’s path ahead.
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This story was originally published by TheStreet on December 23, 2025, where it first appeared in the Retail section. Add TheStreet as a favorite source by clicking here.
