Claire's Demise

Time and time again we hear about how the bad the economy is and how dreadful this recession has been. But when you go to your local mall or strip center you are often remind about how true these statements are. Retailers are fighting to keep their companies alive but unfortunately many companies have or are on their way to declaring bankruptcy and are going to be forced to close their stores.

Many factors are involved in the failures of retailers especially in such a bad economy. A store could fail because of no comparative advantage, lack of resources, inadequate marketing, not having an effective target market, not enough traffic in near the location of the store, etc. In the case of Claire's Store, Inc many of these factors played a role in the downfall of this store.

The downfall of Claire's Store was caused by the fact that the Claire's has to wide of a marketing target which is customers ranging from the age of 3-17, whereas one of their main competitors, Icing focuses their target to 17-23(MarketLine, p.1). With a smaller age range, Icing is able to focus their energy and merchandise towards the same age group. Whereas Claire's tries to satisfy different age groups and a lot of money is wasted on merchandising. Another reason why Claire's is failing is because of the shortcoming in anticipated sales. So this created a huge inventory backup. Gene Kahn, the CEO of Claire's Store, Inc stated that "the fiscal 2008 results reflect the difficult economic environment giving rise to a consumer pullback that is impacting retailers around the globe(MarketLine, p.1)." If Claire's wants to turn this situation around, it is going to take a whole new marketing strategy. And also the help of another company to get them out of debt.

This is an unfortunate but common situation and hopefully retailers are learning from the failures of other companies. Retailers need to focus they marketing strategy and plain and use their resources wisely. And hopefully the economy can be restored within the next couple of years.

MarketLine. (2008, April 7). Claire's Stores: new strategies for growth. Retrieved from http://www.blogger.com/post-create.g?blogID=5089696486507553464

MarketLine. (2008, April 4). Claire's Stores Q4 net sales down. Retrieved from http://libproxy.uncg.edu:4944/library/NewsArticleDisplay.aspx?R=8E826C08-2459-4977-9658-669E341E565A