/C O R R E C T I O N -- Claire's Stores, Inc./

In the news release, Claire's Stores, Inc. Reports Fiscal 2008 Third Quarter Results; Net Sales Increase Three Percent, issued earlier today by Claire's Stores, Inc. over PR Newswire, we are advised by a representative of the company that the footnote reference below the fourth table should read "See below for related footnotes." rather than "See Page 7 for related footnotes." The footnote reference below the fifth and final table that reads "The following footnotes relate to the tables on pages 6 and 7." should not appear. The complete, corrected release follows:



PEMBROKE PINES, Fla., Dec. 14  /PRNewswire-FirstCall/ -- Claire's Stores, Inc., a leading specialty retailer offering value-priced jewelry and accessories, today reported its financial results for the third quarter of Fiscal 2008, which ended November 3, 2007.

Third Quarter Results

The Company reported net sales of $357.4 million for the quarter, a 2.8% increase over the third quarter of Fiscal 2007, which ended October 28, 2006. The increase was primarily attributable to the growth in our new store base, particularly in Europe, and foreign currency translation gains, offset by a slight decrease in same store sales. A 0.5% increase in our average sale per transaction was insufficient to offset a 3.5% decline in the average number of transactions per store.

Third quarter consolidated same store sales declined 0.7%. In North America, same store sales decreased 1.0% versus last year's third fiscal quarter. European same store sales were essentially flat with last year's third fiscal quarter, at negative 0.1%. Please note that we compute same store sales on a local currency basis, and as such they are not impacted by changes in foreign exchange.

Commenting on third quarter results, Chief Executive Officer Gene Kahn said, "This quarter concludes my first full quarter as Claire's CEO. Our third quarter results are reflective of a softening retail environment. In response to consumer demand, we began to shift our product mix from jewelry to accessory classifications in order to capitalize on the strength of handbags, fashion accessories and cosmetics as we completed Back to School and transitioned into Fall. Jewelry sales are currently challenging, except among our younger customers. Our repositioning of Icing is still in its early stages as we work to refine and improve the concept and content. Our merchandise margins improved and through disciplined buying and markdown activity, inventory levels remained low and fresh."

Gross margin, which represents merchandise margin less occupancy and buying expense, declined 170 basis points to 50.7%. A 60 basis point improvement in merchandise margin was more than offset by a loss of operating leverage in rent and rent related items that resulted in a 190 basis point decline, and by higher buying expenses resulting in a 40 basis point decrease.

Selling, general and administrative expenses increased 7.5% to $127.8 million in the third quarter of Fiscal 2008 compared to $118.8 million in last year's comparable fiscal quarter. On a constant currency basis, SG&A expenses increased by only 4.3%, due largely to a 2.1% growth in company operated stores.

For the quarter, Adjusted EBITDA was $60.5 million compared to $68.5 million in the third quarter of Fiscal 2007. The Company defines Adjusted EBITDA as earnings before interest, income taxes, depreciation and amortization, excluding the impact of transaction related costs incurred in connection with the acquisition and other non-recurring or non-cash expenses, and normalizing occupancy costs for certain rent-related adjustments.

At November 3, 2007, our $200 million revolving credit facility was undrawn aside from a $4.5 million letter of credit. Cash and cash equivalents were $78.0 million. During the third quarter of Fiscal 2008, cash provided by operating activities was approximately $24.4 million, compared with cash provided by operating activities of $56.6 million during the third quarter of Fiscal 2007. The change in cash provided by operating activities was impacted by the interest expense associated with debt incurred to fund the acquisition. Capital expenditures during the third quarter of Fiscal 2008 were $23.8 million, of which $19.0 million related to store openings and remodeling projects, with the remainder relating primarily to the enhanced POS rollout. Capital expenditures during the third quarter of Fiscal 2007 were $30.1 million.

Year to Date Results

Net sales for the first nine months of Fiscal 2008 grew 5.4% to $1,063.5 million from $1,008.7 million. Consolidated same store sales decreased 0.4%. For the first nine months of Fiscal 2008, Adjusted EBITDA was $185.5 million compared to $196.6 million in the first nine months of Fiscal 2007.

  Store Count: End of Third Quarter:

                           November 3, 2007            October 28, 2006
  Claire's North America          2,151                        2,145
  Claire's Europe                   900                          842
  Claire's Nippon                   202                          192
  Total                           3,253                        3,179

  Conference Call Information


The Company will host its third quarter conference call on December 14, 2007, at 10:00 a.m. (EST). The call in number is 630-395-0260 and the password is "Claires." A replay will be available through December 20, 2007. The replay number is 203-369-0434 and the password is 25247. The conference call is also being webcast and archived until December 20th on the Company's corporate website at http://www.clairestores.com/, where it can be accessed by clicking on the "Conference Calls" link located under "Financial Information" for a replay or download as an MP3 file.

Company Overview

Claire's Stores, Inc. is a leading specialty retailer of value-priced jewelry and accessories for girls and young women through its two store concepts: Claire's and Icing.  While the latter operates only in North America, Claire's operates internationally. As of December 1, 2007, Claire's Stores, Inc. operated 3,061 stores in the United States, Canada, Puerto Rico, the Virgin Islands, the United Kingdom, Ireland, France, Switzerland, Austria, Germany, Spain, Portugal, Belgium, and the Netherlands. Claire's Stores, Inc. operates through its subsidiary, Claire's Nippon, Co., Ltd., 202 stores in Japan as a 50:50 joint venture with AEON, Co., Ltd.  The Company also franchises 162 stores in the Middle East, Turkey, Russia, Poland, and South Africa.

Forward-looking Statements

This press release contains "forward-looking statements" which represent the Company's expectations or beliefs with respect to future events. Statements that are not historical are considered forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. Those factors include, without limitation: changes in consumer preferences and consumer spending; competition; general economic conditions such as inflation and increased energy costs; general political and social conditions such as war, political unrest and terrorism; natural disasters or severe weather events; currency fluctuations and exchange rate adjustments; uncertainties generally associated with the specialty retailing business; disruptions in our supply of inventory; inability to increase same store sales at historical rates; significant increases in our merchandise markdowns; inability to design and implement new information systems; delays in anticipated store openings or renovations; uncertainty that definitive financial results may differ from preliminary financial results due to, among other things, final GAAP adjustments; changes in applicable laws, rules and regulations, including changes in federal, state or local regulations governing the sale of our products, particularly regulations relating to the metal content in jewelry, and employment laws relating to overtime pay, tax laws and import laws; loss of key members of management; increases in the cost of labor; labor disputes; increases in the cost of borrowings; unavailability of additional debt or equity capital; and the impact of our substantial indebtedness on our operating income and our ability to grow. These and other applicable risks, cautionary statements and factors that could cause actual results to differ from the Company's forward-looking statements are included in the Company's filings with the SEC, specifically as described in the Company's Annual Report on Form 10-K for the fiscal year ended February 3, 2007 and Form 10-Q Equivalent for the quarterly period ended May 5, 2007. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. The historical results contained in this press release are not necessarily indicative of the future performance of the Company.

Additional Information:

Note: Other Claire's Stores, Inc. press releases, a corporate profile and the most recent Annual Report on Form 10-K and Form 10-Q Equivalent are available on Claire's business website at: http://www.clairestores.com/.

  THIRD FISCAL QUARTER

                  CLAIRE'S STORES, INC. AND SUBSIDIARIES
               UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
                              OF OPERATIONS
                              (In thousands)

                             Three Months Ended        Three Months Ended
                              November 3, 2007          October 28, 2006
                              Successor Entity         Predecessor Entity

   Net sales                 $357,366    100.0%        $347,593    100.0%
   Cost of sales,
    occupancy and buying
    expenses                  176,215     49.3          165,487     47.6
   Gross profit               181,151     50.7          182,106     52.4
   Other expenses
    (income):
      Selling, general and
       administrative         127,772     35.8          118,843     34.2
      Depreciation and
       amortization            26,428      7.4           14,249      4.1
      Transaction-related
       costs                    1,200      0.3                -      0.0
       Other income            (1,310)    (0.4)            (754)    (0.2)
                              154,090     43.1          132,338     38.1
   Operating income            27,061      7.6           49,768     14.3
      Interest expense
      (income), net            56,322     15.8           (3,162)    (0.9)
   Income (loss) before
    income taxes              (29,261)    (8.2)          52,930     15.2
   Income taxes               (15,449)    (4.3)          16,303      4.7
   Net income (loss)         $(13,812)    (3.9%)        $36,627     10.5%



  YEAR TO DATE

                  CLAIRE'S STORES, INC. AND SUBSIDIARIES
               UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
                              OF OPERATIONS
                              (In thousands)

                                  Successor Entity     Predecessor Entity
                                       May 29         February 4,    Nine
                                        2007            2007        Months
                                       through         through      Ended
                                     November 3,       May 28,   October 28,
                                        2007             2007        2006

  Net sales                           $638,556        $424,899   $1,008,680
  Cost of sales, occupancy and
   buying expenses                     314,490         206,438      480,540
  Gross profit                         324,066         218,461      528,140
  Other expenses (income):
  Selling, general and
   administrative                      220,513         154,482      348,569
  Depreciation and amortization         39,598          19,652       41,319
  Transaction-related costs              3,261          72,672            -
  Other income                          (1,706)         (1,476)      (1,914)
                                       261,666         245,330      387,974
  Operating income (loss)               62,400         (26,869)     140,166
  Interest expense (income), net        92,250          (4,876)     (11,191)
  Income (loss) before income
   taxes                               (29,850)        (21,993)     151,357
  Income taxes                         (15,231)         21,779       49,067
  Net income (loss)                   $(14,619)       $(43,772)    $102,290



                  CLAIRE'S STORES, INC. AND SUBSIDIARIES
             UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

                                                 Successor     Predecessor
                                                   Entity         Entity
                                                November 3,    February 3,
                                                    2007           2007
                                               (In thousands, except share
                                                  and per share amounts)
  ASSETS
  Current assets:
     Cash and cash equivalents                       $78,038      $340,877
     Inventories                                     156,538       121,119
     Prepaid expenses                                 41,275        35,565
     Other current assets                             25,498        41,081
        Total current assets                         301,349       538,642
  Property and equipment:
     Land and building                                22,288        17,350
     Furniture, fixtures and equipment               118,730       283,556
     Leasehold improvements                          214,223       288,499
                                                     355,241       589,405
     Less accumulated depreciation and
      amortization                                   (36,532)     (324,080)
                                                     318,709       265,325
  Intangible assets, net                             816,212        51,582
  Deferred debt issuance costs, net of
   accumulated amortization of $4,421                 73,140             -
  Other assets                                        71,949        34,775
  Goodwill                                         1,807,052       200,942
                                                   2,768,353       287,299
  Total assets                                    $3,388,411    $1,091,266
  LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
     Trade accounts payable                          $83,960       $56,323
     Current portion of long-term debt                14,500             -
     Income taxes payable                              7,941        35,102
     Accrued interest payable                         49,321             -
     Accrued expenses and other liabilities          105,379       104,026
       Total current liabilities                     261,101       195,451

     Long-term debt                                2,366,875             -
      Deferred tax liability                         142,254        19,424
      Deferred rent expense                            8,623        26,125
      Other liabilities                               12,683         2,604
                                                   2,530,435        48,153

  Stockholders' equity:
     Preferred stock par value $1.00 per share;
      authorized 1,000,000 shares, issued and
      outstanding 0 shares  (predecessor
      entity)                                              -             -
     Class A common stock par value $0.05 per
      share; authorized 40,000,000 shares,
        issued and outstanding 4,869,041 shares
         (predecessor entity)                              -           243
     Common stock par value $0.05 per share;
      authorized 300,000,000 shares, issued and
       outstanding 88,202,733 shares
       (predecessor entity); par value $0.001
       per share;
       authorized 1,000 shares; issued and
       outstanding 100 shares (successor
       entity)                                             -         4,410
     Additional paid-in capital                      598,507        75,486
     Accumulated other comprehensive income,
      net of tax                                      12,987        33,956
     Retained earnings (accumulated deficit)         (14,619)      733,567
                                                     596,875       847,662
  Total liabilities and stockholders' equity      $3,388,411    $1,091,266


  Net income (loss) reconciliation to EBITDA and Adjusted EBITDA


EBITDA represents net income (loss) before provision for income taxes, interest income and expense, and depreciation and amortization.  Adjusted EBITDA represents EBITDA further adjusted to exclude non-cash and unusual items.  Management uses Adjusted EBITDA as an important tool to assess our operating performance.  Management considers Adjusted EBITDA to be a useful measure in highlighting trends in our business and in analyzing the profitability of similar enterprises.  Management believes that Adjusted EBITDA is effective, when used in conjunction with net income (loss), in evaluating asset performance, and differentiating efficient operators in the industry.  Furthermore, management believes that Adjusted EBITDA provides useful information to potential investors and analysts because it provides insight into management's evaluation of our results of operations.  In addition, our calculation of Adjusted EBITDA is consistent with the equivalent measurement in the covenants for the indentures governing the senior notes.

EBITDA and Adjusted EBITDA are not measures of financial performance under GAAP, are not intended to represent cash flow from operations under GAAP and should not be used as an alternative to net income (loss) as an indicator of operating performance or to cash flow from operating, investing or financing activities as a measure of liquidity.  Management compensates for the limitations of using EBITDA and Adjusted EBITDA by using it only to supplement our GAAP results to provide a more complete understanding of the factors and trends affecting our business.  Each of EBITDA and Adjusted EBITDA has its limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. 

  Some of the limitations of EBITDA and Adjusted EBITDA are:
  -- EBITDA and Adjusted EBITDA do not reflect our cash used for capital
     expenditures;
  -- Although depreciation and amortization are non-cash charges, the assets
     being depreciated or amortized often will have to be replaced and
     EBITDA and Adjusted EBITDA do not reflect the cash requirements for
     such replacements;
  -- EBITDA and Adjusted EBITDA do not reflect changes in, or cash
     requirements for, our working capital requirements;
  -- EBITDA and Adjusted EBITDA do not reflect the cash necessary to make
     payments of interest or principal on our indebtedness; and
  -- EBITDA and Adjusted EBITDA do not reflect non-recurring expenses which
     qualify as extraordinary items such as one-time write-offs to inventory
     and reserve accruals.


While EBITDA and Adjusted EBITDA are frequently used as a measure of operations and the ability to meet indebtedness service requirements, they are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation.

While management believes that these measures provide useful information to investors, the SEC may require that EBITDA and Adjusted EBITDA be presented differently or not at all in filings will we make with the SEC.

For the three and nine month periods ended November 3, 2007 and October 28, 2006, a reconciliation of net income (loss) to EBITDA, EBITDA after rent related adjustments and Adjusted EBITDA is set forth in the following tables:

                  CLAIRE'S STORES, INC. AND SUBSIDIARIES
                       (UNAUDITED)  (IN THOUSANDS)

                                     Three Months Ended   Three Months Ended
                                      November 3, 2007     October 28, 2006

  Net income (loss)                        $(13,812)               $36,627

  Income tax                                (15,449)                16,303
  Interest expense                           57,169                     17
  Interest income                              (847)                (3,179)
  Depreciation and amortization              26,428                 14,249
  Reported EBITDA                            53,489                 64,017

  Book to cash rent adjustment (a)            2,736                    552

  EBITDA after rent related
   adjustment                                56,225                 64,569

  Amortization of intangible
   assets (b)                                   540                    438
  Equity income (c)                            (531)                  (130)
  Loss on retirement of property
   and equipment, net (d)                       (62)                   570
  Stock compensation expense (e)              1,944                  2,171
  Consulting expenses (g)                        77                    182
  Fixture leases (h)                            360                    406
  Cost savings (i)                                -                    337
  Management fee (j)                            750                      -
  Transaction related costs (k)               1,200                      -
  Adjusted EBITDA                           $60,503                $68,543

  See below for related footnotes.



                  CLAIRE'S STORES, INC. AND SUBSIDIARIES
                       (UNAUDITED)  (IN THOUSANDS)

                                    Nine Months Ended     Nine Months Ended
                                     November 3, 2007     October 28, 2006

  Net income (loss)                        $(58,391)              $102,290
  Income tax                                  6,548                 49,067
  Interest expense                           94,095                     75
  Interest income                            (6,721)               (11,266)
  Depreciation and amortization              59,250                 41,319
  Reported EBITDA                            94,781                181,485

  Book to cash rent adjustment (a)            4,741                  1,558

  EBITDA after rent related
   adjustment                                99,522                183,043

  Amortization of intangible
   assets (b)                                 1,410                  1,141
  Equity income (c)                          (1,163)                  (475)
  Loss on retirement of property
   and Equipment, net (d)                     1,600                  1,140
  Stock compensation expense (e)              4,108                  5,981
  Legal settlement & related costs (f)          200                  1,250
  Consulting expenses (g)                       612                    700
  Fixture leases (h)                          1,101                  2,075
  Cost savings (i)                              930                  1,731
  Management fee (j)                          1,250                      -
  Transaction related costs (k)              75,933                      -
  Adjusted EBITDA                          $185,503               $196,586


  (a) Represents the elimination of non-cash straight-line rent expense,
      amortization of rent free periods and the inclusion of cash landlord
      allowances.
  (b) Represents the elimination of non-cash amortization of lease rights.
  (c) Represents the elimination of non-cash equity income related to our
      50:50 joint venture with AEON Co. Ltd.
  (d) Represents the elimination of non-cash losses or gains on store
      related property and equipment primarily associated with remodels,
      relocations and closures.
  (e) Represents the elimination of non-cash stock compensation expense.
  (f) Represents the elimination of a legal settlement and fees in
      connection with wage and hour class action litigation in California.
  (g) Represents the elimination of consulting expenses related to our
      European distribution center.  We began to centralize our distribution
      operations in continental Europe by transitioning to a third party
      distribution center in the Netherlands.
  (h) Represents the elimination of non-cash amortization expenses
      associated with synthetic leases of store fixtures. The Company has
      not entered into any new synthetic leases after 2001.
  (i) Reflects the adjustment of executive air travel and other costs to the
      Company's estimate for such costs on a normalized basis and the
      estimated savings on directors' and officers' insurance reflective of
      the Company no longer being a public company.  For purposes of
      estimating these savings, we have assumed an annual air travel budget
      of $250,000 for our senior executive officers.
  (j) Represents the management fee paid to Apollo Management.
  (k) Transaction costs represent legal, financial advisory, compensation,
      and other Acquisition related expenses.


DATASOURCE: Claire's Stores, Inc.



CONTACT:  Marisa F. Jacobs, Vice President of Corporate Communications

and Investor Relations of Claire's Stores, Inc., [phone],

[phone] (fax),  



Web site:  http://www.clairestores.com/ 



Company News On-Call:  http://www.prnewswire.com/comp/174913.html 

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