The Hawaiian legacy vendor has just filed bankruptcy for the second time in recent years claiming it owes more than $10 million to just 20 of its hundreds of unpaid creditors. So can “The Store of Hawaii,” Hilo Hattie remain in business?
The company has unpaid debt of $1.2 million for back rent on its main Honolulu store alone. That in addition to over a half-million in back rent on Maui and over $100k on Kauai.
In January, Hilo Hattie closed its Kihei Maui and Kona Hawaii stores. And in 2008, the company filed its previous bankruptcy following their sale to a California discount hair salon owner.
This is likely the sad end of a half-century era. Hilo Hattie problems have included:
- Reduced discretionary buying by visitors, especially from Japan.
- Their switch from mostly Hawaii-made to less in demand, lower quality, foreign-made garments.
- Inability to keep pace with other Hawaii clothing designers.
- Failure to keep pace with in-demand merchandise.
- High expenses and a tight credit environment.
- Inappropriately large retail spaces.
- Prior failed expansion attempts in Orlando and Las Vegas.
Hilo Hattie has been a Hawaii tradition since 1963. It was founded on Kauai as Kaluna Hawaii Sportswear, and renamed after actress Clarissa Haili, following her death in 1979. Unfortunately, a lack of ongoing design and quality ended up placing them in competition with Wal-Mart, Costco, ABC and others. We don’t know what the future will bring for Hilo Hattie.