Claire’s IPO: Everything you need to know about Claire’s

Claire’s IPO: When will Claire’s go public?

There’s currently no set date for the Claire’s IPO, but it has filed for the listing. Claire’s Holdings is seeking to tell $100 million worth of shares, listing on the New York Stock Exchange under the symbol CLRS. Goldman Sachs and Citigroup are among the company’s underwriters.

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Claire’s was previously listed on the NASDAQ in 2005 but was taken private by Apollo Global Management in a leveraged buyout.

How much is Claire’s worth?

Claire’s Accessories’ last valuation was when it was taken private in 2007 for $3.1 billion – it had since filed for bankruptcy in 2018 after it was saddled with nearly $2 billion in debt.

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What does Claire’s do?

Claire’s Inc is a jewellery and accessories retailer that is widely popular among teens and younger girls across the world. It’s also known for its ear-piercing services - the company says it's pierced over 83 million customers' ears. 

Claire’s operates under two brands – the flagship Claire’s, and Icing. Each store is merchandised differently to encourage consumers to shop in different stores.Claire's largely targets the 3-18 year old segment, appealing as the 'Girl's Best Friend', while Icing focuses on the 18-35 segment, who is more fashion focused with greater spending capacity. Claire’s states it offers a ‘treasure hunt’ shopping experience that encourages its customers to explore and find the latest trends that will still create a ‘unique look’. 

How does Claire’s make money?

Claire’s makes money through the sale of jewellery and other goods throughout its two main segments: North America and Europe. Claire’s operates nearly 1,400 stores in North America, which accounts for over 70% of its net sales. Meanwhile it has almost 900 across Europe, which accounts for 30% of revenue.

The firm also has an additional 324 franchised locations in the Middle East and South Africa. This additional income comes in the form of products sold to these third parties under licensing agreements.

Claire's business is described as seasonal. Its revenues peak during the Christmas, Easter and back-to-school retail periods, this means inventory and sales will heavily play on quarterly results following these periods. 

Any projections of Claire's future cash flows are based on pre-bankruptcy levels - 2012 through to 2017. As of February 2, 2013, Claire's had cash and cash equivalents of $169.3 million

Is Claire’s profitable?

No, Claire’s posted a net loss of $144.3 million for the second quarter of fiscal 2021, compared with a loss of $38 million in the second quarter of fiscal 2020. The teen retailer almost doubled its sales year on year during the first half of 2021, as revenues rose to $356 million from $184 million a year ago.

In the company's SEC-1 filing, a large portion of the financial statements were based on pre-bankruptcy earnings, as it has grappled with large losses since. Under the Chapter 11 reorganisation, it reduced debt by $1.9 billion and passed control of the company to lenders, including Elliott Capital Management and Monarch Alternative Capital. The company believes that going public will help it find significant opportunities and drive long-term growth.

The company – like many other brick-and-mortar stores – was negatively impacted by Covid-19, as consumers were restricted by stay-at-home measures. The company has reopened stores, but additional costs such as rent payment and inventory management have weighed on Claire’s balance sheet.

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What is Claire’s’ business strategy?

Claire’s’ business strategy is based on a ‘service-led retail model’. The company said in its IPO prospectus that it would be focusing on the ‘Gen Z’ consumer segment of ages five to 24, which represents over 2.5 billion consumers globally. According to research, this age group is much more open to spending on their goods. The company benefits from its legacy brand, which  is recognised as a favourite worldwide. 

According to the SEC-1 filing, Claire’s expects to invest more than £150 million by the end of the current financial year to ‘better align our offering with consumer trends, augment our physical and digital presence and enhance growth’

The company intends to invest in an experienced management team, boost its e-commerce side, improve customer experiences – particularly with regard to ear piercing – and launch a loyalty programme.

Due to the current levels of indebtedness, Claire’s has said it is unlikely to offer a dividend for the foreseeable as it will be using any profits to refinance and fund growth. The decision to pay dividends in the future will depend on results and financial conditions.

Who owns Claire’s?

Claire’s is owned by Elliott Management and Monarch Alternative Capital, who took control of Claire’s following its Chapter 11 reorganisation. The two companies will still hold interest and control once the teen retailer is taken public.

Board of directors of Claire’s

Claire’s board of directors and executive team consists of:

• Ryan Vero, Chief Executive Officer and Director
• Colleen Collins, Executive Vice President, Stores
• Richard Flint, Executive Vice President, President of Europe
• Jordana Kammerud, Vice President, Chief Human Resources Officer
• Brendan McKeough, Executive Vice President, General Counsel and Secretary
• Beth Moeri, Executive Vice President, Chief Merchandising Officer
• Kristin Patrick, Executive Vice President, Chief Marketing Officer
• Marc Saffer, Executive Vice President, Chief Information Officer
• Michael Schwindle, Executive Vice President, Chief Financial Officer
• Samantha Algaze, Director and Chairman of the Board of Directors
• Carmen Bauza, Director
• Paul Best, Director
• DeAnn Brunts, Director
• Patrick Fallon, Director
• Theophlius Killion, Director
• Samantha Lomow, Director
• Arthur Rubinfeld, Director