Claire’s Sees Gen Z Growth in IPO Pitch

The specialty retailer says it is "a category leader in the girl’s fashion jewelry and accessories market" and a "leading piercing destination."
Matthew HellerSeptember 30, 2021

Three years after exiting bankruptcy, Claire’s is bringing its concept of fashion jewelry, accessories and ear piercings for the Generation Z market to Wall Street.

The specialty retailer disclosed a large loss for its most recent quarter in an IPO prospectus but said it delivers “a differentiated, trendsetting and diverse assortment of products, many of which are proprietary designs, that help young minds style and define themselves.”

“We believe we have significant opportunities to drive long-term growth in revenue and earnings by further leveraging our brand and dynamic operating platform to expand our physical footprint, attract new consumers, and increase our share of wallet with our core demographic while enhancing our digital presence and consumers’ experience,” the prospectus says.

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By the end of fiscal 2021, Claire’s, which operates 1,390 stores in the United States, expects to have invested “over $150 million in the business to better align our offering with consumer trends, augment our physical and digital presence and enhance growth.”

Founded in Chicago in the 1960s, the company filed for bankruptcy in March 2018 after struggling with the debt burden from a leveraged buyout in which private equity firm Apollo Management took it private.

Under the Chapter 11 reorganization, it reduced debt by $1.9 billion and passed control of the company to lenders, including Elliott Capital Management and Monarch Alternative Capital.

According to the prospectus, Claire’s loss widened to $144.3 million in the second quarter from $38 million a year earlier while revenue rose to $356 million from $184 million. “We are a category leader in the girl’s fashion jewelry and accessories market with strong brand recognition among our core demographic,” the company said.

Claire’s also claims to be “the leading retail piercing destination,” with more than 20% of retail sales for fiscal year 2019 through July 31, 2021, coming from ear-piercing-related transactions.

“Our ear piercing service also functions as an attractive customer acquisition vehicle and drives significant traffic to our stores,” it said. “For the first half of fiscal year 2021, approximately 55% of all ear-piercing customers purchased fashion jewelry or accessories during their visit to our stores.”

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