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Sales fall at Claire’s

Sales at accessories chain Claire’s fell 1.5% to US$360 million (£202.4m) for the second quarter of 2008, while sales at its European stores outperformed its US division.

The value accessories retailer attributed the sales dip to a decline in comparable store sales, which fell 5.8% across the group over the quarter. Within that, like-for-like store sales in North America dipped by 8.1% while European like-for-like store sales fell just 1.7%.

Claire’s added that the average number of transactions per store had fallen by 12%, but said that this had been partially offset by a 7.5% increase in the value of each transaction. In a statement, Claire’s said the increase in sales per transaction “reflects our strategy to increase average ticket through good, better and best price tiering”. The retailer blamed a drop in footfall in shopping malls for the fall in the number of transactions completed.

Claire’s chief executive Gene Kahn said: “In the second quarter we saw an improvement in the tone of business as our comparable store sales improved during each month of the quarter and our merchandise margin increased. We successfully completed phase one of our Pan-European Transformation project. As a result, we have an integrated team managing our European business and a focused North American merchandising team, with dedicated groups responsible for each of our Claire’s and Icing brands.”

Kahn added that Claire’s launched a cost-savings initiative during the quarter and is on target to reach its goal of a US$15m (£8.4m) reduction in expenses for the year.

“We have made significant progress in upgrading our management team and refining our structure, creating a strong foundation to sustain us through this difficult retail environment and positioning us to reach our performance goals,” he said.

Adjusted EBITDA in the second quarter was US$58.1m (£32.4m) compared with US$64.3m (£35.9m) for the equivalent period in 2007.

The gross profit percentage was flat at 49.9% for the second quarters of 2008 and 2007. A 290 basis-point increase in the merchandise margin was offset by an equal increase in occupancy and buying costs.

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