Claire's new owner Ames Watson feuds with Asia-based suppliers over millions in unpaid debt

Tween retailer Claire's is facing ineligible challenges from immoderate of its Asia-based suppliers implicit millions successful unpaid debts arsenic it tries to look from a second bankruptcy nether caller ownership, according to claims the suppliers filed successful Hong Kong. 

The clash with vendors comes arsenic backstage equity steadfast Ames Watson navigates its archetypal vacation season arsenic Claire's caller proprietor and works to guarantee it has the close merchandise successful banal aft buying the promenade retailer and astir 1,000 of its stores retired of bankruptcy for $140 cardinal successful September.

Since acquiring Claire's, Ames Watson has been trying to rebuild what co-founder Lawrence Berger antecedently told CNBC is simply a "broken business." Its bid to get the institution backmost to profitability volition hinge successful portion connected a palmy vacation play and its quality to banal fashionable merchandise moving forward. 

The retailer's sprawling proviso chain, made up of longtime vendors equipped to grip the rigorous information standards governing children's products, has agelong been considered the company's "secret sauce," erstwhile Claire's CEO Ron Marshall told CNBC. Without the enactment of those suppliers during its first bankruptcy successful 2018, the retailer's vacation play would've been a "nightmare," said Marshall, who led the institution from 2016 to 2019.

The quality with suppliers adds different situation for Ames Watson arsenic it tries to hole the agelong struggling retailer. As the U.S. hits the last days of highest shopping, Ames Watson said "Claire's has inventory successful spot for the vacation season."

Claire's disputes with its suppliers successful Asia situation orders placed successful the months earlier the retailer's 2nd bankruptcy filing successful August, erstwhile it was inactive owned by hedge money Elliott Management and having fiscal difficulties. 

Claire's ordering measurement for 1 supplier had dropped by 79% successful March and 76% successful April compared to the anterior year, records reviewed by CNBC show. Then ordering ramped backmost up to the company's regular cadence successful May and June, with measurement down lone 2% and 3% successful those months, respectively, compared to 2024, according to the records.

At the clip Claire's accrued its orders again, the company was moving retired of cash, considering outright liquidation and looking for a purchaser to prevention its business, according to a declaration Claire's CEO Chris Cramer filed with the tribunal aft the institution filed for bankruptcy. 

While the vendors, including those who are present pursuing ineligible enactment against the retailer, were alert the institution was navigating fiscal difficulties erstwhile the orders were placed, they expected to beryllium paid arsenic they had been during the retailer's first bankruptcy filing, said the people, who spoke connected the information of anonymity due to the fact that the discussions were private. 

But by the clip the vendors finished manufacturing the assemblage jewelry, nail polish and relationship bracelets Claire's had ordered up of the vacation buying season, the retailer had filed for bankruptcy protection and the vendors weren't paid for immoderate orders, the radical said. 

When Ames Watson acquired the company, immoderate of the vendors who were owed wealth agreed to support moving with Claire's without getting paid for those debts, concerned they'd suffer 1 of their largest clients and perchance their business, the radical said. But others refused, and person taken ineligible enactment against Claire's Hong Kong-based sourcing bureau RSI International, implicit millions successful unpaid debts, according to claims the suppliers filed successful the section court. 

Meanwhile, astir a week aft Ames Watson announced it would get Claire's retired of bankruptcy, RSI International filed a announcement to transportation its assets to a caller entity. The concern transportation gave creditors 30 days to record a assertion to recoup unpaid debts, aft which transferors aren't liable for the obligations under Hong Kong Law.  

In a connection to CNBC, Ames Watson didn't remark connected RSI International. It said 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," the institution said. "We are excited astir the company's absorption successful 2026," it added.

Hedge money Elliott Management, which owned Claire's astatine the clip the orders were placed, declined to comment.

At the halfway of Ames Watson's strategy to revive Claire's is improving its merchandise, which could go much hard if the institution has strained relationships with some suppliers. Compounding the occupation is President Donald Trump's sweeping tariffs, which person already strained retail proviso chains globally and raised costs for importers. 

Marshall, Claire's erstwhile CEO, said ensuring vendors successful Asia got paid during the company's archetypal bankruptcy was cardinal to having the close products successful spot for the vacation play that year.

"These were suppliers wherever we had generational relationships and successful galore cases, represented 30, 40, 50% oregon adjacent much of their full volume, and the intelligence superior that represented was halfway to the occurrence of Claire's," Marshall said. "There's a quality betwixt having merchandise connected the shelves, which we could person done, and having the close merchandise connected the shelves."

He said the disputes Claire's is having with its suppliers could "disrupt the proviso chain" some present and moving forward, making a turnaround much difficult. 

"There needs to beryllium fresh, caller merchandise to lure [customers] into the store, and if you don't person that continual replenishment of truly breathtaking product, she's gonna walk you by," said Marshall. "This is virtually the astir fickle lawsuit successful the world: an 8-year-old girl."