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                                                                EXHIBIT (10)(r)

THIS DEED is made on December ___, 1997 between:

         CLAIRE'S STORES, INC., whose registered office is situated at 3 S.W.
         129th Avenue, Pembroke Pines, Florida 33027 (the "Company"); and

         MARK GERARD SMITH of 51 Croftdown Road, Harborne, Birmingham, West
         Midlands B17 8RE (the "Borrower").

1.       THE LOAN

         The Company will advance to the Borrower the sum of (pound) 300,000
         (the "Loan") within five days of the date of this Deed.

2.       INTEREST

         No interest shall be payable on the Loan.

3.       REPAYMENT OF THE LOAN

         The Loan shall become repayable to the Company on demand in full on the
         earliest of the following (each a "Repayment Event"):

         3.1      a petition for bankruptcy or personal insolvency being filed
                  against the Borrower and having not been dismissed within
                  seven (7) days of the same; or

         3.2      the sale of all or any fully paid ordinary shares in the
                  capital of Claire's Accessories UK Limited (the "Shares") held
                  by the Borrower or the cancellation of any options over such
                  Shares held by the Borrower pursuant to the Amended and
                  Restated Employee Option of even date or the Trigger Agreement
                  of even date made between the Company and the Borrower.

4.       PAYMENTS

         4.1      By Borrower: Payment by the Borrower under this Agreement
                  shall be made, without set-off or counterclaim, in sterling in
                  same day funds by credit to the Company's account and/or bank
                  as it may from time to time designate.

         4.2      By Company: Payment by the Company under this Deed shall be
                  made in sterling to such account notified to the Company by
                  the Borrower.


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5.       RIGHT OF SET-OFF

         5.1      Where a Repayment Event occurs, the Company shall be
                  entitled to set-off against the Loan or against any part of
                  the Loan outstanding any amount owed to the Borrower by the
                  Company and for the avoidance of doubt any amounts owed to
                  the Borrower pursuant to any purchase of Shares or options
                  contemplated under Clause 3.2 above.

         5.2      In the event of the death of the Borrower, reference to the
                  Borrower in Clause 5.1 shall be deemed to include references
                  to the personal representatives of the Borrower.

6.       NOTICES

         6.1      Any notice requiring to be served under or in connection with
                  this agreement shall be in writing and shall be delivered or
                  sent:

                  6.1.1    In the case of the Borrower, to the address of the
                           Borrower shown at the top of this document or such
                           other address as may have previously been notified to
                           the Company for this purpose; and

                  6.1.2    In the case of the Company, to its treasurer at its
                           registered office shown at the top of this document
                           or such other address as may have been previously
                           notified to the Borrower for this purpose.

         6.2      In the case of the death of the Borrower and until the Company
                  has received notice in writing of the grant of probate of his
                  will or letters of administration of his estate any such
                  notice so given shall be as effective as if he were still
                  living.

         6.3      Any such notice shall be delivered by hand, facsimile
                  transmission or sent by pre-paid first class post and:

                           (i)      if delivered by hand shall conclusively be
                                    deemed to have been received at the time of
                                    delivery;

                           (ii)     if sent by facsimile shall conclusively be
                                    deemed to have been received at the time of
                                    dispatch; and

                           (iii)    if sent by post shall conclusively be deemed
                                    to have been received 48 hours from the time
                                    of posting.

7.       GOVERNING LAW

         This Agreement will be governed by and construed in accordance with
English law.


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         IN WITNESS of which this agreement has been duly executed as a deed on
the date stated at the beginning.

         SIGNED as a Deed by
         Claire's Stores, Inc.            -------------------------------------
         acting by                        Director
         and


                                          -------------------------------------
                                          Secretary


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