Sept. 02--Struggling teen accessories chain Claire's Stores continued to suffer losses in the second fiscal quarter of 2015 as store closings and the strengthening dollar hurt its efforts to return to profitability. Here's how the quarter played out for the Hoffman Estates-based retailer, and a bit of what's to come:
By the numbers: Claire's lost $18.9 million in the three months that ended Aug. 1, a slight improvement from the $20.6 million it lost during the same period last year. For the first six months of the fiscal year, the company lost $54.3 million, slightly less than the $58.7 million it lost during the same period last year.
Revenue: Second-quarter sales fell to $347.6 million, down from $377.8 million a year ago. For the first six months of the fiscal year, sales fell to $667.6 million, from $731.2 million.
Same-store sales: Getting more girls to buy jewelry at its stores remains tough for Claire's. Though sales in stores open at least a year in the U.S. grew by 0.7 percent, a decline in European sales of 5.2 percent more than wiped that out. Declining sales of Fun Weevz jewelry-making kits explained most of the decline in Europe, CEO Beatrice LaFon said Wednesday. Company-wide, same-store sales were down 1.7 percent.
The "why": A strengthening dollar meant Claire's overseas revenues weren't worth as much. Net sales in U.S. dollars fell by 8 percent, but had the exchange rate not been a factor, that figure would have been just 1.3 percent, Claire's said. The company has closed 72 stores in the U.S. and 26 in Europe. "Overall we are on track to deliver $80 million of cost savings," LaFon said.
Highlights from the quarter: A public relations push, including a presence at the Coachella festival, helped Claire's get an estimated $9.2 million worth of free media coverage in the first half of the fiscal year.
What's next: Claire's is consolidating its three merchandising and buying teams into one team serving both Europe and the U.S., based in Hoffman Estates. It is still working through the closure of 150 stores, many of which will only shut when the leases run out.
kjanssen@tribpub.com
