Managing a business is challenging even in the best of circumstances. In today’s uncertain economy, marked by declining consumer spending and changing retail habits, it becomes even more difficult.
For one retail chain, the difficulty has been compounded by years of financial stress, two Chapter 11 bankruptcies, and the closing of hundreds of stores nationwide.
Once an iconic mall staple known for its affordable jewelry, colorful hair accessories, and quirky novelties, Claire’s is once again facing serious financial problems. A new revelation has cast doubt on the long-term survival of the 64-year-old brand, which once played an important role in the lives of countless teenagers and tweens.
As it works its way out of its second bankruptcy under new ownership by private equity firm Ames Watson, Clare is facing further pressures from its supply chain. Claims filed in Hong Kong by several Asian suppliers and reported by CNBC allege they owe millions of dollars in unpaid debts.
The orders at issue were for holiday trades placed before Clare’s second bankruptcy filing, when Elliott Management still owned the company. Suppliers were reportedly aware of the retailer’s financial instability when making the orders. However, by the time production was completed, Claire had already filed for bankruptcy.
After Ames Watson acquired the brand, some suppliers claimed they still owed money, but agreed to continue doing business with Claire’s. Others chose to take legal action against Claire’s Hong Kong-based sourcing office, RSI International.
As a major American retail chain, Claire’s is a major customer for many of these Asian suppliers. For this reason, despite outstanding balances, many sellers continued to fulfill orders fearing that refusing to do so would jeopardize their business relationship with the retailer.
During its latest takeover process, RSI International notified creditors that they had 30 days to file claims to recover unpaid debts, liabilities not transferred to new owners under Hong Kong law.
In a statement to CNBC, Ames Watson emphasized that it was “not involved in operations or purchasing decisions made prior to the acquisition.”
“Since then, we have focused on conducting business responsibly and engaging suppliers in good faith, strengthening Clare for the long term,” said Ames Watson. “We are excited about the company’s direction in 2026.”
In the midst of bankruptcy restructuring, Claire’s face Asian suppliers‘ Claims for unpaid debts.Shutterstock” loading=”eager” height=”540″ width=”960″ class=”yf-lglytj loader”/>
In the midst of bankruptcy restructuring, Claire’s faces Asian suppliers‘ Claims for unpaid debts.Shutterstock
Claire first filed for Chapter 11 bankruptcy in 2018, following Elliott Management Corp. that year. and emerged under the new ownership of Monarch Alternative Capital.
However, due to constant changes in retail trends, intense competition, slow consumer spending, and the continued growth of online shopping, the initial restructuring process was not enough to prevent Claire from accumulating more debt.
In August 2025, Clair filed for Chapter 11 bankruptcy for the second time, reporting estimated assets and liabilities between $1 billion and $10 billion.
At the time of the filing, the retailer operated more than 2,750 stores in 17 countries, including about 1,350 locations in the U.S., Icing stores and Walmart shop-in-shops.
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After a second bankruptcy, Claire’s was acquired by Ames Watson in September 2025 in a nearly $140 million deal that included 950 stores. The firm assumed a significant portion of the retailer’s liabilities, including vendor and landlord debt, remediation costs, and the continued employment of its employees, while providing $36 million in vendor financing.
The acquisition prevented mass store closings and allowed Claire’s to continue liquidation sales at North American locations. At the time, the deal was seen as a turning point, with the retailer saying the move would “help Claire’s brand become a leading retailer for teens, tweens and young girls worldwide.”
Despite the new ownership, a total of 291 stores were eventually 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% to 4.2% annually, according to the National Retail Federation (NRF), to more than $1 trillion.
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 significant increases in fixed operating costs.
Even amid continued economic uncertainty and rising inflation, consumers plan to spend an average of $890.49 per person this holiday season, the second-highest amount on record.
“The economy continues to show surprising resilience in a year marked by trade uncertainty and persistent inflation,” said NRF Chief Economist Mark Matthews. “As traffic increases consumer prices, retailers have tried to hold the line on prices, given the uncertainty of trade policies.”
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While strong holiday sales may provide short-term relief, Claire’s long-term recovery remains uncertain. Strained supplier relationships threaten to disrupt retailers’ supply chains, and newly imposed U.S. tariffs under President Donald Trump add another layer of complexity.
Although tariffs on Chinese imported goods were originally much higher, the US and China agreed to maintain a temporary 10% mutual tariff baseline until November 2026 as part of a truce. China has also agreed to suspend retaliatory tariffs from 2025.
“The recent one-year suspension is a positive sign. It supports our view that despite ongoing de-risking efforts, strict decoupling or trade restrictions are unlikely in the near term,” JPMorgan economist Ting Jie said.
“Both sides appear willing to compromise, but strategic competition will continue with further tit-for-tat actions and the possibility of possible escalation or de-escalation in the coming ceasefire period.”
For Claire, the holiday season may offer temporary relief, but unresolved supplier disputes, lingering debt, and broader financial pressures continue to cloud the retailer’s path forward.
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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 preferred source by clicking here.
