Claire’s, the tweens and teens accessories store that stocks all sorts of jeweled earrings and necklaces that an 8-year-old girl would want, is making a comeback.
Back in 2018, the company filed for bankruptcy and closed dozens of stores across the country, mostly in malls. Today, Claire’s is out of bankruptcy and establishing stores outside of malls. The company expects revenue growth of 53% for fiscal 2021 and plans to go public.
Elizabeth Segran, an executive at Fast Company, wrote about the company’s comeback. Marketplace host Reema Khrais spoke to Segran about Claire’s success as a long-established company in a rapidly changing retail market. The following is an edited transcript of their conversation.
Reema Khrais: So I read your article. And it sounds like I’m not the only one in this interview who has very clear memories of shopping at Claire’s as a kid.
Elizabeth Segran: Oh my god yeah my whole tween years were, all the memories of my tweens are like going to claire’s the same.
Khrais: But you know, I was really surprised to learn that not only is it still there, but it’s thriving. Before we get into why, can you give us a better idea of how this legacy business is doing financially?
Victory: So it was actually founded in 1971. But its earnings were closely tied to the mall’s success. And as the mall fell off as a hotspot, sales began to fall. And in 2018, it actually filed for bankruptcy. But in a truly remarkable turnaround story over the past four years, the executive team has not only managed to pull the company out of bankruptcy, they are now heading for an IPO that could raise as much as $100 million. And last year it had sales of $1.4 billion.
Khrais: Wow. OK, so let’s talk about this big comeback. How did it go from bankruptcy to going public?
Victory: Well, basically you know the mall isn’t entirely dead. That’s their basic belief that there are some malls that are doing really well. And so the #1 key for them, you know, is making sure their stores are in those more prestigious malls. But their other really interesting strategy was to set up stores outside of malls. So you could go into CVS and see how a little mini Claire walks. Even a grocery store, and maybe there’s a little Claire’s section there.
Khrais: OK, so this is, yeah, this strategy seems like a pretty simple, you know, way to get Claire’s to places where customers are already shopping. And how much of its success has to do with just the fashion and market trends we’re currently seeing?
Victory: Well, I think part of the brand’s recent success has been that ’90s fashion has made a comeback.
Khrais: It’s back!
Victory: Absolutely, and so scrunchies were super in and Claire’s was just like, they actually have a really great supply chain because they’re rich in scrunchies. And it has been working with some of its factory partners for decades and can respond to trends very, very quickly. And that’s part of his success.
Khrais: You mentioned in your article that there is a team of “trend spotters” who just travel the world and find out what might be the next popular thing.
Victory: i want this job
Khrais: It sounds so interesting. And going back to something you said about the scrunchies. There’s also this really nice detail in your article where you wrote how I think scrunchies were a massive trend in 2019 because teens would wear them to indicate they had a girlfriend. And so Claire said, “I’m in!” And they’ve released millions of hair ties, which I find hilarious.
Victory: Yes. And what was so interesting about it is that they could see this trend several years in advance.
Khrais: It’s interesting that in some ways they’ve been well-suited to the pandemic and resulting supply chain issues that we’ve seen. Can you tell a little bit more about it?
Victory: Total. When ships were grounded and they couldn’t ship products, they could load them onto airplanes and fly over them. And because they sell such tiny little items, they’ve really been able to pack a lot into a container that fits on an airplane. And so any supply chain issues really weren’t a problem for Claire’s.
Khrais: Caught. So now Claire’s is sort of a case study of what it takes for old businesses to survive. But what do you think will ensure continued success?
Victory: So I think Claire’s managed that despite being a big legacy business, it was very nimble. And it’s been looking for opportunities to go places customers are already visiting. As malls continue to decline, Claire’s seems poised to pop up on your street corner instead.
Khrais: Yes, and if I take away something from this conversation is that there will always be a demand among tweens for jeweled pizza earrings and strawberry lip gloss.
Victory: Oh my god, and maybe even for her parents.
Khrais: Yes, exactly.
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