Despite the festive atmosphere of the holiday season, suppliers and creditors of US fashion accessories chain Claire’s – including about 70 from Hong Kong, mainland China and across Asia – face financial anxieties as they grapple with the uncertain prospects of recovering debts following the retailer’s recent bankruptcy filing.
Some have already taken legal action, though the outcome of their claims remains unclear.
The financial anxieties stem from the company’s decision in August to file for bankruptcy in the US for the second time in seven years amid slowing consumer spending and the switch to online shopping. The tween jewellery and ear-piercing retailer had nearly US$500 million in loans due by December 2026.
In September, Ames Watson, a privately held investment firm with a track record in revitalising iconic brands, acquired Claire’s for US$140 million. Later that month, RSI International, Claire’s Hong Kong-based sourcing office, sought to transfer “certain assets and liabilities in connection with the business” to Tractus Asia, also based in Hong Kong, by October 31, 2025.
The move triggered an immediate legal fallout. Sebang Chain from South Korea – Claire’s supplier for more than 30 years – and its two subsidiaries in Asia filed suit in Hong Kong’s High Court against RSI and Tractus for allegedly refusing to pay overdue and pre-filing invoices and the asset transfer.
Sebang was facing US$1.5 million in overdue payments and about US$2 million worth of finished goods produced for Claire’s, according to sources familiar with the matter. The amount is equivalent to about three months of Sebang’s revenue. A writ of summons issued in late October sought US$1.43 million in unpaid balances, potential damages and interest.
Major US cosmetics vendor Pretty Woman filed a similar claim against RSI and Tractus for US$715,000 in outstanding receivables, according to a High Court filing in early October.
Other Asian creditors include Hong Kong-listed HKBN’s enterprise service arm, which did not respond to requests for comment.
Suppliers hope the lawsuits will pressure Claire’s Hong Kong agents and its new owner to settle debts. “Claire’s relies heavily on its sourcing operations in Asia, and any disruption to that sourcing structure creates operational vulnerability and risk,” according to people familiar with the matter.
Former Claire’s CEO Ron Marshall told the Post that suppliers in Asia were “critical for Claire’s”, adding that its extensive self-managed supply chain had been a competitive advantage.
On the alleged US$1.5 million in overdue payments, Ames Watson said in a written reply to the Post that it was not involved in operations or purchasing decisions made before the acquisition. The investment firm said it had spoken with suppliers to gauge their willingness to continue working with Claire’s.
Some suppliers were weighing their legal options, according to sources. Legal consultants caution that recovery efforts and attempts to block asset transfers face significant challenges, with lawsuits serving more as a means to reduce losses. They advise smaller vendors to hedge risks by buying trade credit insurance and inserting binding terms linked to parent companies in contracts.
Not all creditors have been left unpaid. “All is OK,” said Yair Hayman, a senior manager at Thailand-incorporated AMA Design International, whose Hong Kong unit is on the creditor list. Hayman did not elaborate on the total debt amount.
Founded in 1961, Claire’s became a mall staple known for trendy jewellery and ear piercing, catering to young women and teenage girls. However, consumer habits have shifted in the social media era.
Claire’s CEO Chris Cramer blamed “the ongoing shift away from bricks-and-mortar retail” and intensifying competition for the company’s second bankruptcy.
US retail sales remained flat in September and October due to rising costs and weak labour markets under President Donald Trump’s tariffs. A University of Michigan report showed US consumer sentiment in December was the second lowest after May, with nearly half of the respondents blaming high prices for their poor personal finances. -- SOUTH CHINA MORNING POST
