A high debt load and added costs from higher tariffs is pushing the U.S. operations of tween retailer Claire’s to the brink.

The accessories firm — which sells an assortment of jewelry, socks, slippers, beauty, hair accessories and home — relies heavily on a supply chain based in China. Retail price points on average range from $4.99 to $19.99, although a few items are as low as $1.99 and could go as high as $34.99 for a shoulder bag or even $49.99 for a sherpa throw or backpack.

Claire’s is owned by Elliott Management Corp. and Monarch Alternative Capital, who were part of the creditor group that took control of the retailer after it filed for Chapter 11 bankruptcy court protection in March 2018. The bankruptcy helped Claire’s eliminate $1.9 billion of debt. The retailer exited bankruptcy proceedings seven months later. The tween retailer said in October 2018 that it gained $575 million in new capital in its reorganization.

Neither Elliott nor Monarch representatives responded to a request for comment by press time.

The tween retailer said in 2021 that it was planning an initial public offering, but that plan was abandoned in 2023. In recent years, the girls’ accessories chain has expanded its consumer reach through concessions, or shop-in-shops, in retailers that include Walmart and Macy’s.

But Claire’s has been struggling for years. It faces challenges from other retailers that also cater to its customer base. Those include e-tailers such as Shein and Temu, who both offer a wider range of better quality merchandise at the same low price points. Claire’s also operates an e-commerce site. Sales in stores and online often sell items on a BOGO (buy-one-get-one-free) basis, or its current buy two and get one free promotion. That kind of enticement may get some sales out the door, but add little to the bottom line when margins are fairly low to start.

Bloomberg reported in May that the chain had started deferring debt interest payments due to tariff tensions. The retailer has a $475 million loan due in December 2026. Troubled chains hold off on interest payments to preserve cash. Often times that maneuver for cash preservation can indicate a retailer who is considering a Chapter 11 filing. Bankruptcies are expensive, and bankrupt companies need the cash to keep operations afloat while in bankruptcy proceedings. It also can be a sign that the company, or its financial advisors, believe there could be tight limits on what can be secured in debtor-in-possession financing.

There’s been talk in the retail market that the retailer’s owners are seeking a buyer. But who might want to buy all of Claire’s or its parts remains to be seen. The European operations would not be impacted by a U.S. Chapter 11 filing.

The retailer was once owned by the Schaefer family. It became a publicly-traded firm in 2005 and was taken private in a $3.1 billion leveraged buyout by Apollo Global Management in 2007.

Claire’s isn’t the only company that faces financial pressures because of additional duties imposed by U.S. President Donald Trump’s reciprocal tariffs that were disclosed on April 2. That move had many footwear firms, as well as apparel manufacturers, pondering what will be their new cost structure.

India, which produces shoes and apparel, is said to be close to a trade agreement with the U.S. But Brazil on Wednesday was socked with an astronomical 50 percent reciprocal tariff. And while Vietnam has an agreement for a 20 percent tariff rate, the parameters for the terms of the trade deal have not been disclosed. Both Vietnam and China, which has a current duty of 30 percent through Aug. 12, are big manufacturers of shoes and apparel. Meanwhile, Cambodia and Indonesia on Tuesday both received tariff letters setting their duty rate at 36 percent and 32 percent, respectively, starting Aug. 1 if no trade deal materializes.

Those rates noted in Trump’s tariff letters could send upstream vendors everywhere scrambling to fine-tune their operating model to see if they even have a business left, once the new duties go into effect.