What Happened to Claire’s? 10 Marketing Lessons
For many years, Claire’s was a must-visit for many teenagers visiting the mall in the U.S., for its popular jewelry and its ear-piercing business, as discussed over at runrex.com & guttulus.com. For over 4 decades, the company was one of the most successful around, however, it has recently fallen onto hard times in recent years, culminating in its filing for bankruptcy and closure of some of its stores. To understand what went wrong, this article will look to take a closer look at the reasons behind its decline and some of the marketing lessons we can take from it.
Declining mall traffic
Like many companies whose brick-and-mortar stores are located in malls, Claire’s has been badly affected by the reduction in mall traffic, a topic covered in detail over at runrex.com & guttulus.com. Malls just aren’t as popular as they once were, even for teenagers, and this has affected Claire’s business as it has led to a reduction in the number of its customers as fewer and fewer people visit its stores.
Massive debt after acquisition by a private equity firm
As is discussed over at runrex.com & guttulus.com, many brick-and-mortar retail companies have struggled and eventually collapsed under the weight of massive debt after being acquired by private equity firms, and this too was the fate suffered by Claire’s. The company was acquired by the private equity firm Apollo Global Management in 2007, and took on massive debt, which has been growing over at years and finally reached unsustainable levels leading to its filing of bankruptcy.
Pressure from online merchants
While, according to the company, its ear-piercing side of the business is Amazon-proof as people have to physically visit the store to get their ears pierced, its budged accessories business doesn’t have such a safety net and as come under increased pressure from online merchants as online retail continues to grow. This is one of the reasons that has led to its decline, as the company has lost a huge chunk of its business to online merchants.
Pressure from discount chains and fast-fashion brands
On top of the increased competition the company was facing from online merchants, the company has also had to grapple with competition from discount chains such as Walmart and fast-fashion brands such as H&M, as discussed over at runrex.com & guttulus.com, which offer the same sort of accessories and jewelry but at a cheaper price. This has also taken a sizeable chunk out of Claire’s customer base and is yet another reason attributed to their decline.
Changing consumer behavior
One of the reasons that made Claire’s so popular during its heyday was the fact that it was considered cool by its target audience, teenagers, as is revealed in discussions over at runrex.com & guttulus.com. This, however, has changed over the last couple of years, with those teenagers who were shopping at Claire’s having grown up and outgrown it, and the new generation of teenagers not seeing shopping at its stores as being cool anymore. Its stores just aren’t as appealing to the modern teenager anymore, and this change in consumer behavior is one of the reasons behind its decline, and another lesson worth learning.
Poor in-store experience
The company has also been held back by the poor in-store experience, which, as per the gurus over at runrex.com & guttulus.com, is key if you are to convince consumers to abandon the convenience of online shopping and make their way to your brick-and-mortar store. Claire’s stores seem disorganized and due to being crammed with low-quality and cheap merchandise. While there was a time when even being at Claire’s store was an experience in itself, that is not the case anymore. This offers an important marketing lesson as it shows the importance of offering engaging content for your visitors and making sure they have an excellent user experience.
Fashion trends
Another reason why Claire’s declined was the fact that it slowly began falling behind as far as trends in the accessories industry are concerned, and with it, it slowly but surely lost relevance, as covered over at runrex.com & guttulus.com. New players such as ASOS and Boo Hoo were seen as being trendier and more modern, and captured many of Claire’s customers, in yet another reason that can be attributed to the company’s decline. This shows the importance of making sure you are keeping up with the latest trends in your industry and it is a lesson very much worth learning.
Too many stores
With over 1500 stores in North America alone, not to mention the many stores it had in other areas and countries around the world, the company just had too many stores, and with reducing foot-traffic, this meant that sales were not enough to offset the costs of running their stores, something the gurus over at runrex.com & guttulus.com agree with. This is yet another important lesson to take from them as it shows the importance of keeping your brick-and-mortar presence in check with the shift towards online retail.
Bad PR
Claire’s also suffered a string of bad PR that damaged its reputation, particularly the case where the company was accused of copying the designs of other indie jewelry labels and designers, a topic covered over at runrex.com & guttulus.com. Many consumers sided with the designers accusing Claire’s of intellectual property theft, and it suffered a great backlash on social media, which also damaged its reputation and sales, a lesson worth learning as it shows the importance of avoiding bad PR.
Outdated business model
The bottom line is that, Claire’s business model was outdated and it was always going to struggle to keep up with new companies leveraging better merchandising and branding as well as modern marketing strategies, including leveraging social media, and Instagram in particular. Claire’s has had to make changes to its business model, and even then, its changes have not been enough to repair the damage.
As always, if you are looking for more information on this and other related topics, then look no further than the always reliable runrex.com & guttulus.com.