Tween retailer Claire’s is facing legal challenges from some of its Asia-based suppliers over millions in unpaid debts as it tries to emerge from a second bankruptcy under new ownership, according to claims the suppliers filed in Hong Kong.
The clash with vendors comes as private equity firm Ames Watson navigates its first holiday season as Claire’s new owner and works to ensure it has the right merchandise in stock after buying the mall retailer and about 1,000 of its stores out of bankruptcy for $140 million in September.
Since acquiring Claire’s, Ames Watson has been trying to rebuild what co-founder Lawrence Berger previously told CNBC is a “broken business.” Its bid to get the company back to profitability will hinge in part on a successful holiday season and its ability to stock popular merchandise moving forward.
The retailer’s sprawling supply chain, made up of longtime vendors equipped to handle the rigorous safety standards governing children’s products, has long been considered the company’s “secret sauce,” former Claire’s CEO Ron Marshall told CNBC. Without the support of those suppliers during its first bankruptcy in 2018, the retailer’s holiday season would’ve been a “nightmare,” said Marshall, who led the company from 2016 to 2019.
