How teen hotspot Claire went from bankruptcy to IPO filing

Claire’s, the tween and teen accessories store, is back with every jeweled earrings and necklace an 8-year-old girl could want.

In 2018, the company filed for bankruptcy and closed dozens of stores across the country, mostly in malls. Today, Claire’s has gone bankrupt and has opened stores outside its malls. The company expects sales growth of 53% for fiscal 2021 and plans an initial public offering.

Elizabeth Segran, a senior writer at Fast Company, has written about the company’s comeback. “Marketplace” host Reema Khrais spoke with Segran about Claire’s success as a legacy business in the rapidly changing retail market. The following is an edited transcript of their conversations.

Reema Khrais: That’s why I read your article. And it looks like I’m not the only person in this interview who has very specific memories of shopping at Claire’s as a kid.

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Elizabeth Segran: Oh my God, yes, all my tween years were, all the memories of my tween years are the same, like going to Claire’s house dominates.

Khrais: But, you know, I was really surprised to find out that not only is it still around, but, you know, it’s improving. So before we get into the reasons, can you give us a better idea of ​​how this old business went financially?

Victory: So it was actually founded in 1971. But their revenue was deeply tied to the mall’s success. And as the mall declined as a kind of hotspot, you know, sales started to drop. And in 2018, it actually filed for bankruptcy. But in a truly remarkable story of comeback over the past four years, not only has the management team managed to bail it out from bankruptcy, it’s now heading for an IPO that can cost up to $100 million. Last year, it generated $1.4 billion in revenue.

Khrais: Wow. Ok, let’s talk about this big comeback. How did he go from filing for bankruptcy to filing for public offering?

Victory: Well, basically you know, the mall isn’t completely dead. It’s their core belief that some malls do really well. And key number 1 for them, you know, is to have their stores in these more prestigious malls. But their other really interesting strategy was to set up stores, not malls. So you can get into CVS and see it like a little Claire’s hallway. There may even be a grocery store and a small Claire’s section there.

Khrais: Okay, yeah, this strategy seems pretty simple, you know, bringing Claire’s where customers are already shopping. And how much of its success has to do with the fashion and market trends we’re seeing right now?

Victory: I think part of the brand’s recent success was that, you know, ’90s fashion was kind of making a comeback.

Khrais: It’s back!

Victory: Altogether, and that’s why the scrunchies were super and Claire’s was just like the bountiful scrunchies, the company has a really great supply chain. And it’s been working with some factory partners for decades and can respond to trends really quickly. And that’s part of its success.

Khrais: There’s a team of “trend watchers” you mentioned in your article that travels the world to find out what might be the next popular thing.

Victory: I really want that job.

Khrais: Sounds very interesting. Also, back to something you said about scrunchies. Also, there is a really nice detail in your article where you wrote that I think hairpins are a big trend in 2019 because young men wear them to indicate they have a girlfriend. And so Claire said, “I’m in!” It was like. And millions of buckles came out that I found funny.

Victory: Yes. And the very interesting thing about it is, you know, they could see this trend coming a few years from now.

Khrais: Yes, it’s interesting from your point of view that they are, in a way, very relevant for the pandemic and the supply chain issues that we’re seeing as a result. Can you talk a little more about this?

Victory: Completely. When ships ran aground and couldn’t ship products, they could put them on a plane and fly them over. And because they were selling such small items, they were able to really fit a lot into a container that could take a plane. And so not all supply chain issues really became a problem for Claire’s.

Khrais: Understood. So Claire’s is now a kind of case study of what legacy businesses may require to survive. However, what do you think will drive his success forward?

Victory: So I think what Claire can do is very agile despite being a big legacy business. And it’s looking for opportunities to go where customers are already going. If the malls keep dwindling, Claire’s looks like it’s ready to pop up on your street corner.

Khrais: Yes, and if there’s one thing I’ve taken out of this conversation, there’s always going to be a demand for jeweled pizza earrings and strawberry lip gloss in between.

Victory: Oh my god, and maybe for their parents.

Khrais: Yes definitely.

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