CLAIRE’S TO ACQUIRE FRENCH CHAIN
Byline: Thomas Cunningham
NEW YORK — Claire’s Stores Inc. said it will acquire the French chain, Cleopatre, and outlined an aggressive European expansion plan.
Claire’s, which specializes in accessories, will pay $11 million in cash for the 42-unit chain in a deal expected to close before the end of February. The privately held Cleopatre, which has its headquarters in Paris, will become a wholly owned subsidiary of Claire’s, although the acquired units will continue to operate under the Cleopatre name, Claire’s said.
Claire’s, based in Pembroke Pines, Fla., plans to double Cleopatre’s annual sales per store, which run around $250,000, by adding Claire’s merchandise to Cleopatre’s, Rowland Schaefer, Claire’s chairman and chief executive, said in a statement. Cleopatre’s units average 500 square feet and are in malls and city centers, Claire’s said.
“Claire’s is committed to growing the European segment of our business,” Schaefer said. “We see a huge growth opportunity in Europe with a potential of at least 1,300 additional stores in countries where we already have a presence.”
In France alone, Cleopatre could reach 500 stores, said Glenn Canary, Claire’s director of investor relations. The other European nations slated for expansion are Switzerland, Austria and Germany. Claire’s already has 57 stores in those three countries under the Bijoux One name. Bijoux One, which Claire’s acquired in November 1998, is performing ahead of plan, Schaefer said in his statement.
The 1,300-store estimate does not include the growth potential of other European countries, like Italy, Spain, Portugal and Belgium, Canary added.
“There is serious thought in our company that eventually Claire’s Europe will be bigger than Claire’s America,” Canary said. “[Europeans] have never seen anything like Claire’s — that is one of the reasons our operation in Great Britain has been so successful.”
In the last 3 1/2 years, Claire’s has expanded its operations in Great Britain from 48 units to 284 units, Canary said. On a sales-per-square-foot basis, the U.K. stores are three times more productive than their U.S. counterparts, he added. Claire’s also operates 84 units in Japan under a joint venture with JUSCO, a Japanese firm.
Earlier this month, Claire’s acquired its largest competitor in the U.S. accessories market, the 768-unit Afterthoughts chain, for $250 million. Including the Afterthoughts stores and its Mr. Rags young men’s chain, Claire’s operates over 3,000 stores in the U.S., the Caribbean, Canada, Japan and Europe.
Claire’s shares gained 1/2 to close at 20 7/8 on the New York Stock Exchange Tuesday.