Claire’s plans further international expansion
Growth on track despite tough Christmas
Claire’s has confirmed plans to expand internationally in two further countries during 2005, despite a tough Christmas market which has led to the accessories retailer lowering its fourth quarter forecasts.
Across the five weeks to January 1, Claire’s group comparable store sales increased five per cent, compared to a six per cent increase in the same period last year. Total sales during the period increased nine per cent to $224m.
Comparable store sales for Claire’s North America increased in the positive low single digits, and for Claire’s International in the positive high single digits. The Icing by Claire’s chain saw an increase in the positive high single digits.
Marla Schaefer, co-chairman and co-CEO said: “Based on prior trends, we had anticipated a late start to the holiday selling season. At the same time, we expected traffic to spike in the two weeks preceding Christmas, especially on account of the two extra selling days between Thanksgiving and Christmas versus last year.
“However, traffic did not reach anticipated levels, causing our results to come in below plan. Post- Christmas sales have been robust and a large increase in gift card sales over last year is providing potential upside for January. Nevertheless, we are revising our fourth quarter guidance to reflect our recently updated internal plans.
“We do not believe our December performance is attributable to a major ‘miss’ in either our accessory or jewelry selections, and in fact, sell throughs on our holiday related and gift items were very high.
“On a consolidated basis in North America, our average unit retail price and our unit per transaction numbers this December exceeded last December, leading as well to a higher average dollar sale. Business did not, however, reach anticipated levels, as transactions were essentially flat.
“Our revised projections take into account more modest expectations for January. We are also evaluating inventory levels now, so that we begin Fiscal 2006 in a clean position. I want to conclude by noting that initial sales of spring and seasonal Valentine’s Day merchandise are encouraging, although we remain cautious based on our limited experience to date with this new inventory.”
Bonnie Schaefer, co-chairman and co-CEO said: “Our efforts to strengthen our international operation continue and the results can clearly be seen in terms of improved comparable store sales. The introduction of North American best practices is continuing and measurable progress can be seen in the stores.
“Inventory selection and levels have been refined, our stores are more visually appealing than they were earlier this year, promotional items are being positioned more successfully and customer service has been enhanced. While we are pleased with this progress, our efforts in this area are far from complete and we expect further improvements to be forthcoming.
“We view Fiscal 2006 as the kick off point for our efforts to aggressively build Claire’s brand internationally. Beyond expanding where we currently own stores, we will be opening company owned stores in at least two new countries in the latter half of Fiscal 2006. We see significant opportunities in these markets and are already working to secure locations meeting our criteria.
[img r]clairesUK.jpg[/img]”In addition, Claire’s stores operated by our licensing partners in the Middle East and South Africa have been performing particularly well. As a result, new store openings in their respective territories will be accelerated in Fiscal 2006.”
