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Claire's Growth Slows

PEMBROKE PINES, FL-The accessory and jewelry retailer had good growth in Q4, but not as strong as before.

By Dees Stribling | Updated on March 10, 2005

PEMBROKE PINES, FL-For Claire’s Stores Inc., single-digit comp-store sales growth in its fiscal Q4 2005 was something of a letdown. “The fourth quarter did not meet our expectations,” noted co-chairman and co-CEO Marla Schaefer during Thursday’s earnings conference call. “Store traffic fell dramatically right after Halloween, and didn’t resume anticipated levels until a few days before Christmas. We had positioned ourselves to continue to deliver double-digit comp sales increases, but due to the shortfall, we had to change our strategy.”

It had been a red-hot year for Claire’s until the fourth quarter. During the first, second and third quarters of fiscal 2005, comps grew 11%, 10% and 9% respectively over the same quarters in fiscal 2004. Still, the accessory and jewelry retailer’s same-store sales numbers for the fourth quarter (ended Jan. 29, 2005) weren’t too shabby, posting a 5% increase over the same period a year earlier. For the entirety of fiscal 2005, the company saw an 8% increase in comp-store sales.

“We acted quickly by canceling some orders, and moving up some planned markdowns,” Schaefer continued. “So we lessened the impact of excess inventory. However, increased promotional activities, primarily in January, affected revenues, margins and net incomes.”

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