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GIRLS JUST WANNA HAVE FUN

At Claire’s Stores that means vast array of costume jewelry, accessories for ages 7 to 27

BY JESSICA ROE

“Getting ready is half the fun!”

That’s what the Claire’s tag line says, and Teagan Flaherty is convinced it’s so. The 5-year-old had begged her mom to let her get her ears pierced at Claire’s.

“I like dressing up,” Teagan said, just before choosing a bracelet to match her new rhinestone floral earrings. The girl has dozens of styles to choose from at this Claire’s store in the Rouse Co.-owned Staten Island Mall, where she is shopping with her mother, Belinda.

Pembroke Pines, Fla.-based Claire’s Stores offers low-priced costume jewelry and accessories for tweens, teens and young adults. “There really isn’t another accessory store,” said Bonnie Schaefer, co-chairman and co-CEO of Claire’s Stores. “Other stores carry bits and pieces, but they can’t really touch us as far as our selection. It’s very vast. We offer as much as 1,100 to 1,500 items per store. That’s hard to compete with.”

Indeed, rhinestone tiaras, tortoise-shell hair clips, neon-colored flip-flops, lock-bound diaries and strands of faux pearls are just some of the baubles, bangles and bright, shiny, beaded accessories found inside the company’s nearly 3,000 stores in the United States, Canada, Puerto Rico and the U.S. Virgin Islands, as well as Austria, France, Germany, Ireland, Switzerland and the United Kingdom.

The company runs 131 Claire’s units in Japan through its Claire’s Nippon subsidiary, as part of a 50-50 joint venture with Aeon Co., a $25 billion specialty retailer with headquarters in Chiba, near Tokyo. Further, Claire’s Stores licenses 65 stores in Lebanon, Turkey, the United Arab Emirates and elsewhere in the Middle East under a licensing and merchandising agreement with Al Shaya Co., a retailer based in Safat, Kuwait.

Though the company says it fears no direct competition as a vendor of accessories exclusively, it nonetheless vies with scores of other apparel-oriented retailers, from Rave Girl to J.C. Penney to the Piercing Pagoda, in pursuit of its core demographic groups. Claire’s Stores operates two retail formats: Claire’s, which caters to girls age 7 to 16, and Icing by Claire’s, which serves their big sisters in the 17-to-27 age group.

Bonnie Schaefer and her sister, Marla, took over from their father, company founder Rowland Schaefer, in November 2002. As acting co-chairmen and co-CEOs, they have made both chains cleaner, brighter and easier to shop.

“With both concepts, we’re trying to project a fun, inviting image,” said Bonnie Schaefer. The purple-and-pink carpeting, white ceiling tiles and accent lighting attract attention even across a crowded mall corridor. The merchandise is easily accessible so even the youngest girls can hold up an item to see how it looks.

Claire’s is the company’s older and more extensive venue, with 1,664 North American stores. It’s also the more productive financially, averaging sales of $376 per square foot in a space that typically spans 1,000 square feet.

Part of the lure for the younger girls, who are the core customers, is the extensive inventory of licensed products, from SpongeBob SquarePants plush toys to Snapple lip gloss. For their mothers, price and suitability of merchandise is a major plus.

When Belinda Flaherty organized a sleepover for daughter Aliyah, 8, she first took the girls to Claire’s to shop for their big night. “The store is full of a lot of inexpensive, fun, girly things,” Flaherty said.

Matching the merchandise to the two distinct age groups has been an issue since the company merged the Claire’s North America buying team with the Icing by Claire’s group last year. “It didn’t work as separate entities,” Schaefer said.

The Icing format underwent an evolution following Claire’s Stores’ acquisition of the Afterthoughts fashion and accessories brand in 1999. Over the next two years, the company struggled to incorporate these new stores into the existing structure and define a target audience.

The company decided to revamp Icing by Claire’s (as it came to be called) to hone in on the 17-to-27 market. “With Icing, we’re looking to project an edgier image, something that’s a little more trendy and a little more over the top,” Schaefer said.

Today the typical 1,200-square-foot Icing by Claire’s store offers the company’s usual mix of jewelry and accessories, but with a decidedly different attitude. The hoop earrings are larger. The plush pillows come in leopard prints instead of Hello Kitty motifs. There are body clips for the navel, the nose, the lips, the toes. And the mothers and grandmothers shopping in an Icing are as likely to be shopping for themselves as for their daughters.

The merchandising and differentiation between the two brands is better, according to Christina de Marval, a retail analyst at at New York City-based Sidoti & Co. “Same-store-sales momentum seems to be accelerating in response to an increased focus on testing, quality improvements, more-sophisticated fashion and experimentation with higher price points,” de Marval wrote recently in a research report. “Considering sales per square foot were $269 at Icing compared to $376 at Claire’s in fiscal year 2003, we argue there is further opportunity to increase productivity at Icing by further differentiating the fashion assortment and store presentation.”

Schaefer says the company expects to introduce 200 Icing by Claire’s and 100 Claire’s over the next several years. “Generally we like to go into major malls, lifestyle centers and strip centers where there’s a lot of foot traffic,” Schaefer said.

The company prefers to have a location in center court, or as near to it as possible, and welcomes the chance to benefit from the traffic generated by other retailers catering to the same demographics, whatever their merchandise.

In North America the company’s consolidated same-store sales for June grew 11 percent over last June, and it anticipates full-year revenue growth this year of about $1.24 billion to $1.26 billion, or between 12 and 13 percent, year-on-year. (The company’s fiscal year ends Jan. 31.)

Meanwhile, the company sees its best short-to-mid-term growth prospects in Europe, where it bought 42 Cleopatre stores in France in 2000, 53 Bijoux One units in Austria, Germany and Switzerland in 1998 and 46 Bow Bangles stores in the United Kingdom in 1996.

Each chain has been rebranded as a Claire’s. And because the acquisitions strategy seems to have worked so well, Claire’s Stores plans to stay with it. “It’s much easier for us to acquire,” Schaefer said, “because then we have the existing real estate and infrastructure.”