Exhibit (2) (a)

                  AGREEMENT AND PLAN OF MERGER
                   DATED AS OF MARCH 9, 1998
                             AMONG
                     CLAIRE'S STORES, INC.,
                     CSI ACQUISITION CORP.,
                        LUX CORPORATION
                              AND
       DAVID SHIH, EVA SHIH, DANIEL SHIH, DOUGLAS SHIH, 
                   THE SHIH IRREVOCABLE TRUST
                              AND
                     CRESTWOOD PARTNERS LLC

<PAGE>
     
                        TABLE OF CONTENTS

                            ARTICLE I
                            THE MERGER                 Page No.

 1.1   The Merger. . . . . . . . . . . . . . . . . . . . . .1
 1.2   The Closing . . . . . . . . . . . . . . . . . . . . .2
 1.3   Effective Time. . . . . . . . . . . . . . . . . . . .2
 1.4   Conversion of Securities               . . . . . . . 2
 1.5   Intentionally deleted                   . . . . . . .2
 1.6   Issuance of Claire's Common Stock; Delivery of 
          Certificates                       . . . . . . . .2
 1.7   Effect of the Merger                    . . . . . . .3
 1.8   Accounting and Tax Treatment               . . . . . 3

                           ARTICLE II
    REPRESENTATIONS AND WARRANTIES OF THE CLAIRE'S COMPANIES
 2.1   Corporate Status . . . . . . 3
 2.2   Corporate Power and Authority. . . . . . . .4
 2.3   Enforceability . . . . . . . 4
 2.4   Claire's Common Stock. . . . . . .4
 2.5   No Commissions . . . . . . . 4
 2.6   Tax Matters. . . . . . .4
 2.7   No Violation . . . . . .5
 2.8   SEC Filings. . . . . . .5
 2.9   Absence of Certain Changes or Events . . . . . . 6
 2.10  Litigation . . . . . . .6
 2.11  Capitalization . . . . . . . 6

                          ARTICLE III
    REPRESENTATIONS AND WARRANTIES OF LUX, THE SHIHS AND THE
                          STOCKHOLDER
 3.1  Corporate Status . . . . . . 7
 3.2  Power and Authority. . . . . . . .7
 3.3  Enforceability . . . . . . . 7
 3.4  Capitalization; Changes in Equity Interests. . . . . .8
 3.5  Ownership of Lux and the Stockholder . . . . . . 8
 3.6  No Violation . . . . . .8
 3.7  Records of Lux . . . . . . . 9
 3.8  Subsidiaries . . . . . .9
 3.9  Financial Statements . . . . . . .9
 3.10 Changes Since the Current Balance Sheet Date . . . . . . . 9
 3.11 Liabilities of Lux . . . . .10
 3.12 Litigation . . . . . . 11
 3.13 Environmental Matters. . . . . . 11

<PAGE>

 3.14 Real Estate. . . . . . 15
 3.15 Good Title to and Condition of Assets. . . . . .17
 3.16 Compliance with Laws . . . . . . 17
 3.17 Labor and Employment Matters . . . . .18
 3.18 Employee Benefit Plans . . . . . 19
 3.19 Tax Matters. . . . . . 21
 3.20 Insurance. . . . . . . 22
 3.21 Receivables. . . . . . 23
 3.22 Licenses and Permits . . . . . . 23
 3.23 Adequacy of the Assets; Relationships with Customers and 
        Suppliers; Affiliated Transactions. . . . .  . . .23
 3.24 Intellectual Property. . . . . . 23
 3.25 Contracts. . . . . . . 24
 3.26 Significant Customers. . . . . . 25
 3.27 Accuracy of Information Furnished. . . . . 25
 3.28 Investment Intent; Accredited Investor Status; 
        Securities Documents. . . . . .25
 3.29 Bank Accounts; Business Locations. . . . . 25
 3.30 Names; Prior Acquisitions. . . . . . .25
 3.31 No Commissions . . . . . . .26
 3.32 Certain Accounting Matters . . . . . .26
 3.33 Inventory. . . . . . . 26
 
                          ARTICLE IV
             CONDUCT OF BUSINESS PENDING THE MERGER
 4.1  Conduct of Business by Lux, the Shihs and the Stockholder Pending the
      Merger.. . . . . . . . . . . . . . . . . . . . . . . . . . . .26

                           ARTICLE V
                     ADDITIONAL AGREEMENTS
 5.1  Further Assurances . . . . .29
 5.2  Compliance with Covenants. . . . . . .29
 5.3  Cooperation. . . . . . 29
 5.4  HSR Act and Other Actions. . . . . . .29
 5.5  Access to Information. . . . . . 29
 5.6  Notification of Certain Matters. . . . . . 30
 5.7  Tax and Accounting Treatment . . . . .30
 5.8  Confidentiality; Publicity . . . . . .30
 5.9  Non-Solicitation . . . . . .30
 5.10 Exclusive Dealings; Failure to Consummate Without Cause. . . . . . .30
 5.11 Claire's Due Diligence Review and Environmental Assessment . . . . .31
 5.12 Lux's Due Diligence Review . . . . . .32
 5.13 Trading in Claire's Common Stock . . . . . 32

<PAGE>

 5.14 Intentionally deleted. . . . . . 32
 5.15 Stockholder and Director Vote. . . . . . . 32
 5.16 Additional Financial Statements. . . . . . 32
 5.17 Intentionally deleted. . . . . . 32
 5.18 Non-Competition. . . . . . .32
 5.19 Lease Amendment. . . . . . .34
 5.20 Consulting Agreement.. . . . . . 34

                          ARTICLE VI
    CONDITIONS TO THE OBLIGATIONS OF THE CLAIRE'S COMPANIES
 6.1  Accuracy of Representations and Warranties and Compliance with
      Obligations. . . . . . . . . . . . . . . . . . . . . . . . . .34
 6.2  No Material Adverse Change or Destruction of Property. . . . . 34
 6.3  Corporate Certificate. . . . . . 35
 6.4  Opinion of Counsel . . . . .35
 6.5  Consents . . . . .35
 6.6  Pooling Letters. . . . . . .36
 6.7  Acknowledgment of Pooling Restrictions; Receipt of SEC Filings; 
       Completion of Due Diligence . . . . . . . . . . . . .36
 6.8  Lux Common Stock . . . . . .36
 6.9  Stock Powers . . . . . 36
 6.10 No Adverse Litigation. . . . . . 36
 6.11 Government Approvals . . . . . . 36
 6.12 Due Diligence Review . . . . . . 36
 6.13 Releases . . . . .36
 6.14 Additional Financial Statements. . . . . . 37
     
                     ARTICLE VII
    CONDITIONS TO THE OBLIGATIONS OF LUX, THE SHIHS AND THE
                          STOCKHOLDER
 7.1  Accuracy of Representations and Warranties and Compliance with
      Obligations. . . . . . . . . . . . . . . . . . . . . . . . . .37
 7.2  Claire's Shares. . . . . . .37
 7.3  No Adverse Litigation. . . . . . 37
 7.4  HSR Act Waiting Period . . . . . 38
 7.5  Opinion of Counsel . . . . .38
 7.6  Release of Obligations . . . . . 38
 7.7  No Material Adverse Change . . . . . .38
 7.8  Due Diligence Review . . . . . . 38
 7.9  Reorganization Letter. . . . . . 38

<PAGE>

                          ARTICLE VIII
                      REGISTRATION RIGHTS
 8.1  Registration Rights for Claire's Shares; Filing of Registration 
       Statement. . . . . 39
 8.2  Expenses of Registration . . . . . . .39
 8.3  Furnishing of Documents. . . . . 39
 8.4  Amendments and Supplements . . . . . .39
 8.5  Duration . . . . .40
 8.6  Further Information. . . . . . . 40
 8.7  Indemnification. . . . . . .40
 8.8  Publication of Financial Results . . . . . 42
    
                          ARTICLE IX
                        INDEMNIFICATION
 9.1  Agreement by the Shihs and the Stockholder to Indemnify. . . . . . .42
 9.2  Survival of Representations and Warranties . . . . . 43
 9.3  Procedures for Defense of Third Party Actions. . . . . . .43
 9.4  Security for the Indemnification Obligation. . . . . 44
 9.5  Voting of and Dividends on the Held Back Shares. . . . . .45
 9.6  Delivery of Held Back Shares and Cash Collateral . . . . .45
 9.7  Adjustment to Merger Consideration . . . . . . .46
 9.8  Indemnity for Environmental Claims.. . . . . . .46
 9.9  Remedies Exclusive; Waiver . . . . . .46
 
                          ARTICLE X
                     SECURITIES LAW MATTERS
 10.1 Disposition of Shares. . . . . . 47
 10.2 Legend . . . . . .47

                          ARTICLE XI
                          DEFINITIONS
 11.1 Defined Terms. . . . . 48
 11.2 Other Definitional Provisions. . . . . . . 49

                         ARTICLE XII 
                          TERMINATION
 12.1 Termination. . . . . . 49
 12.2 Effect of Termination. . . . . . 50

<PAGE>

                          ARTICLE XIII
                       GENERAL PROVISIONS
 13.1 Notices. . . . . .50
 13.2 Entire Agreement . . . . . .51
 13.3 Expenses . . . . .51
 13.4 Amendment; Waiver. . . . . .51
 13.5 Binding Effect; Assignment . . . . . .52
 13.6 Counterparts . . . . . 52
 13.7 Interpretation . . . . . . .52
 13.8 Governing Law; Interpretation. . . . . . . 52
 13.9 Arm's Length Negotiations. . . . . . .52

<PAGE>

LIST OF EXHIBITS AND SCHEDULES


Schedule 3.1             Fictitious Names

Schedule 3.4             Changes in Equity Interests

Schedule 3.6             Required Approvals

Schedule 3.8             Subsidiaries

Schedule 3.9             Financial Statements

Schedule 3.10            Dividends and Distributions

Schedule 3.12            Litigation

Schedule 3.13            Environmental Matters

Schedule 3.14(a)         Owned Properties

Schedule 3.14(b)         Leases and Leased Premises

Schedule 3.15            Assets

Schedule 3.17            Compensation of Employees

Schedule 3.18            Employee Benefit Plans

Schedule 3.24            Intellectual Property

Schedule 3.25            Contracts

Schedule 3.29            Bank Accounts

Schedule 4.1(f)          Capital Expenditures

Exhibit 5.19             Lease Amendment

<PAGE>
                       AGREEMENT AND PLAN OF MERGER
     AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
March 9, 1998, among Claire's Stores, Inc., a Delaware corporation 
("Claire's"), CSI Acquisition Corp., a Washington corporation and a wholly 
owned subsidiary of Claire's ("Merger Sub" and together with Claire's 
sometimes hereinafter referred to as the "Claire's Companies"), Lux 
Corporation, a Washington corporation ("Lux"), Crestwood Partners LLC, a 
Washington limited liability company and the sole stockholder of Lux (the
"Stockholder"),and David Shih ("David"), Eva Shih ("Eva"), Daniel Shih 
("Daniel"), Douglas Shih ("Douglas"), and the Shih Irrevocable Trust 
(the "Trust"), all of whom constitute all of the members of the Stockholder 
as of the date hereof (David, Eva, Daniel, Douglas and the Trust are 
sometimes referred to herein individually as a "Shih" and collectively, as the
"Shihs").  Certain other capitalized terms used herein and not otherwise 
defined shall have the meanings as set forth in Article XI hereof.

     WHEREAS, the Boards of Directors of Claire's, Merger Sub and Lux each
have determined that it is in the best interests of their respective 
companies and stockholders for Claire's to acquire all of the issued and 
outstanding capital stock of Lux; and

     WHEREAS, in order to effectuate the acquisition, Claire's has organized
Merger Sub as a wholly owned subsidiary, and the parties have agreed, subject 
to the terms and conditions set forth in this Agreement, to merge Merger Sub 
with and into Lux so that Lux will continue as the surviving corporation and 
become a wholly owned subsidiary of Claire's, and in consideration thereof, 
Claire's will issue to the Stockholder shares of its common stock, $.05 par 
value per share; and

     WHEREAS, it is intended that the Merger (as defined in Section 1.1 hereof)
provided for herein shall be treated for accounting purposes as a pooling of 
interests business combination, and shall be treated for tax purposes as a 
tax-free reorganization under Section 368(a) of the Internal Revenue Code of 
1986, as amended (the "Code"). 

     NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein, the parties hereto hereby agree as 
follows:
                           ARTICLE  I
                           THE MERGER
1. 1 The Merger.  Subject to and upon the terms and conditions of this
Agreement and in accordance with the Washington Business Corporation Act of 
the State of Washington (the "WBCA"), at the Effective Time (as defined in 
Section 1.3 hereof), Merger Sub shall be merged with and into Lux 
(the "Merger") and as a result thereof the separate corporate existence of 
Merger Sub shall thereupon cease and Lux shall be the surviving corporation 
and shall continue its corporate existence under the laws of the State of
Washington. Lux as the surviving corporation after the Merger is hereinafter 
sometimes referred to as the "Surviving Corporation".

<PAGE>

1. 2 The Closing.  Subject to the terms and conditions of this Agreement, the
closing of the Merger (the "Closing") shall take place at the offices of 
Claire's legal counsel, Greenberg Traurig Hoffman Lipoff Rosen & Quentel, 
P.A., 1221 Brickell Avenue, Miami, Florida 33131, at 12:30 p.m., local time, 
on the third business day following satisfaction or waiver of the conditions 
set forth in Articles VI and VII hereof,  or such other time, date or place 
as the parties hereto may agree in writing.  The date on which the Closing 
occurs is hereinafter referred to as the "Closing Date". 

1. 3 Effective Time.  If all the conditions to the Merger set forth in 
Articles VI and VII hereof shall have been fulfilled or waived in accordance 
herewith and this Agreement shall not have been terminated as provided in 
Article XII hereof, the parties hereto shall cause Articles of Merger 
(the "Articles of Merger") meeting the requirements of Section 23B.11.050 of 
the WBCA to be properly executed and filed in accordance therewith
on the Closing Date.  The Merger shall become effective at the time of filing 
of the Articles of Merger with the Secretary of State of the State of 
Washington in accordance with the WBCA, or at such later time which the 
parties hereto shall have agreed upon and designated in such
filing as the effective time of the Merger (the "Effective Time").

1. 4 Conversion of Securities.  At the Effective Time, by virtue of the Merger
and without any action on the part of Claire's, Merger Sub, Lux or the 
Stockholder:

( a) Conversion of Lux Capital Stock.  Each share of Class A
Common Stock, with no par value per share, of Lux and each share of Class B 
common stock, with no par value per share, of Lux (collectively, the 
"Lux Common Stock") issued and outstanding immediately prior to the Effective 
Time, as the case may be, shall be converted into and exchanged for 
1,071.5065 shares (the "Exchange Ratio") of validly issued, fully paid
and non-assessable unregistered shares of common stock, par value $0.05 per 
share, of Claire's ("Claire's Common Stock"), that is, an aggregate 2,143,013 
shares of Claire's Common Stock (the "Merger Consideration"). 

( b) Conversion of Capital Stock of Merger Sub.  Each share of
common stock of Merger Sub issued and outstanding immediately prior to the 
Effective Time shall be converted into and exchanged for one validly issued, 
fully paid and non-assessable share of Class A common stock, without par value,
of the Surviving Corporation.

[1. 5     Intentionally deleted]. 

1. 6 Issuance of Claire's Common Stock; Delivery of Certificates.  At the
Effective Time, Claire's shall issue to the Stockholder the number of shares of
Claire's Common Stock issuable pursuant to Section 1.4(a), registered in the 
name of the Stockholder, equal to the product (rounded to the nearest whole 
share) of (a) the number of shares of Lux Common Stock owned by the 
Stockholder at the Effective Time and (b) the Exchange Ratio, and shall 
deliver such shares in the following manner:  (a) Claire's shall set aside 
and hold in accordance with Article IX hereof Certificates for 214,000 shares 
of Claire's Common Stock (the "Held Back Shares"); and (b) Claire's shall 
deliver to the Stockholder one or more certificates evidencing the balance of 
such shares of Claire's Common Stock.  The shares of Claire's Common Stock, 
including the Held Back Shares, issuable by Claire's in the Merger are 
sometimes herein referred to as the "Claire's Shares".  Subject to the terms 
and conditions of Article VIII hereof, Claire's shall register the Claire's 
Shares under the Securities Act for resale by the Holders (as defined in 
Section 8.1 hereof) thereof.

<PAGE>

1. 7 Effect of the Merger.  At the Effective Time, the effect of the Merger
shall be as provided under the WBCA.  Without limiting the generality of the 
foregoing, at the Effective Time:

( a) all property, rights, privileges, policies and franchises of Lux and
Merger Sub shall vest in the Surviving Corporation and all debts, liabilities 
and duties of Lux and Merger Sub shall become the debts, liabilities and 
duties of the Surviving Corporation.

( b) the Articles of Incorporation and By-Laws of Lux, as amended
pursuant to the Certificate of Merger, shall be the Articles of Incorporation 
and By-Laws of the Surviving Corporation thereafter, unless and until 
thereafter changed or amended as provided therein or by applicable law.

( c) the directors and officers of Merger Sub immediately prior to the
Effective Time shall be the initial directors and officers of the Surviving 
Corporation, each to hold office in accordance with the Articles of 
Incorporation and By-Laws of the Surviving Corporation and until their 
respective successors are duly elected and qualified. 

1. 8 Accounting and Tax Treatment.  The parties hereto acknowledge and
agree that the Merger contemplated hereby shall be treated as a pooling of 
interests business combination for accounting purposes and as a tax-free 
reorganization under Section 368(a) of the Code for tax purposes.

                          ARTICLE  II
    REPRESENTATIONS AND WARRANTIES OF THE CLAIRE'S COMPANIES

As a material inducement to Lux, the Shihs and the Stockholder to enter into
this Agreement and to consummate the transactions contemplated hereby, each 
of the Claire's Companies hereby, jointly and severally, make the following 
representations and warranties to Lux, the Shihs and the Stockholder:

2. 1 Corporate Status.  Claire's is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.  
Merger Sub is a corporation duly organized and validly existing under the laws
of the State of Washington.  The Claire's Companies are duly qualified or 
licensed to conduct business as foreign corporations and are in good standing 
in all jurisdictions that require such qualification or licensing, except for 
the lack of qualification or licensing which, individually or in the
aggregate, would not have a Material Adverse Effect on Claire's .

2. 2 Corporate Power and Authority.  Each of the Claire's Companies has
the corporate power and authority to execute and deliver this Agreement, 
to perform its respective obligations hereunder and to consummate the 
transactions contemplated hereby.  Each of the Claire's Companies has taken 
all action necessary to authorize its execution and delivery of this 
Agreement, the performance of its respective obligations hereunder and the
consummation of the transactions contemplated hereby.

<PAGE>

2. 3 Enforceability.  This Agreement has been duly executed and delivered
by each of the Claire's Companies and constitutes a legal, valid and binding 
obligation of each of the Claire's Companies, enforceable against each of the 
Claire's Companies in accordance with its terms, except as the same may be 
limited by applicable bankruptcy, insolvency, reorganization, moratorium or 
similar laws affecting the enforcement of creditors' rights generally and 
general equitable principles regardless of whether such enforceability is
considered in a proceeding at law or in equity.

2. 4 Claire's Common Stock.  Upon consummation of the Merger and the
issuance and delivery of certificates representing the Claire's Shares to the 
Stockholder, and except for any Liens imposed on such Claire's Shares by any 
action or inaction of the Stockholder, the Stockholder shall have good and 
marketable title to the Claire's Shares subject to the terms and conditions 
of Article IX hereof, and the Claire's Shares will be validly issued, fully 
paid and non-assessable shares of Claire's Common Stock.

2. 5 No Commissions.  None of the Claire's Companies has incurred any
obligation for any finder's or broker's or agent's fees or commissions or 
similar compensation in connection with the transactions contemplated hereby.

2. 6 Tax Matters.  Claire's does not know of any circumstances relating to
Claire's or its Affiliates that would prevent the Merger from qualifying as a
reorganization within the meaning of Section 368 of the Code, provided that 
(except as set forth in this Section 2.6) Claire's makes no affirmative 
representations or warranties as to any circumstances relating to, or any 
actions taken or agreed to be taken prior to the Effective Time by Lux, the 
Shihs and/or the Stockholder that would prevent the Merger from
qualifying as a reorganization within the meaning of Section 368 of the Code.  
Claire's presently has, and at Closing shall have, no plan or intention to 
(a) cause Lux or any permitted transferee therefrom to sell or dispose of any of
the assets or properties of Lux, except for dispositions in the ordinary 
course of business or transfers described in Section 368(a)(2)(c) of the 
Code, (b) to liquidate Lux, (c) to merge Lux with or into another corporation 
or corporations, (d) to sell or otherwise dispose of the stock of Lux except 
for transfers of stock to a corporation or corporations "controlled" (within 
the meaning of Section 368 of the Code) by Claire's, or (e) to cause Lux to 
issue additional shares of stock that would result in Claire's losing 
"control" (within the meaning of Section 368 of the Code) of Lux.  Claire's 
currently intends, and at Closing shall intend, to cause Lux to continue its
historical business or use a significant portion of its historical business 
assets in a business following the Effective Time, and presently does not 
intend to reacquire any of the Claire's Shares.  Immediately prior to the 
Merger, Claire's will own all of the outstanding capital stock of Merger Sub.  
Further, the assets and liabilities of Merger Sub as of the time
immediately preceding the Closing will represent all of the assets and 
liabilities ever held by Merger Sub.

<PAGE>

2. 7 No Violation.  The execution and delivery of this Agreement by the
Claire's Companies, the performance by the Claire's Companies of their 
obligations hereunder and the consummation by the Claire's Companies of the 
transactions contemplated by this Agreement will not (i) contravene any 
provision of the Certificate of Incorporation (or the equivalent thereof) or 
By-laws (or the equivalent thereof) of the Claire's Companies or any 
subsidiary thereof, (ii) violate or conflict with any law, statute, ordinance,
rule, regulation, decree, writ, injunction, judgment, filing or order of any 
Governmental Authority or of any arbitration award which is either applicable 
to, binding upon or enforceable against the Claire's Companies or any 
subsidiary thereof, (iii) conflict with, result in any breach of, or 
constitute a default (or an event which would, with the passage of time or
the giving of notice or both, constitute a default) under, or give rise to a 
right to terminate, amend, modify, abandon or accelerate, any material 
Contract which is applicable to, binding upon or enforceable against the 
Claire's Companies or any subsidiary thereof, (iv) result in or require the 
creation or imposition of any Lien upon or with respect to any of the 
property or assets of the Claire's Companies or any subsidiary thereof, (v) 
give to any individual or entity a right or claim against the Claire's 
Companies or any subsidiary thereof, which would have a Material Adverse 
Effect on the Claire's Companies or any subsidiary thereof, taken as a
whole, or (vi) require the consent, approval, authorization or permit of, or 
filing with or notification to, any Governmental Authority, any court or 
tribunal or any other Person, except (a) pursuant to the Exchange Act and the 
Securities Act and applicable NYSE rules and regulations, (b) filings 
required under the securities and blue sky laws of the various states, (c) 
filings required under the HSR Act, (d) any filings required to be made by 
Lux and (e) any filings required to be made with respect to the consummation 
of the Merger.

2. 8 SEC Filings.  From January 1, 1997 through the date hereof, Claire's
has duly and timely filed with the SEC all quarterly and annual reports, 
proxy statements and the information and documents and other reports required  
to be filed pursuant to Sections 13, 14 or 15(d) of the Exchange Act 
(collectively, the "SEC Filings").  Claire's has previously made available to 
representatives of the Stockholder copies of all such SEC Filings, and with
respect to SEC Filings filed after the date of this Agreement until the 
Effective Time, Claire's will promptly furnish to the Stockholder copies of 
any such SEC Filings filed with the SEC during such period.  As of their 
respective dates (but taking into account any amendments filed prior to the 
date of this Agreement), the SEC Filings complied, or, with respect to SEC
Filings filed after the date of this Agreement, will comply, in all material 
respects with all of the rules and regulations promulgated by the SEC and did 
not contain, or, with respect to SEC Filings filed after the date of this 
Agreement, will not contain, any untrue statement of a material fact or omit 
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they 
were made, not misleading.  The financial statements of Claire's included in 
the SEC Filings comply as to form in all material respects with applicable 
accounting requirements and the published rules and regulations of the SEC 
with respect thereto, have been prepared in accordance with GAAP consistently 
applied during the periods presented (except, in the case of the unaudited
statements, as permitted by Form 10-Q of the SEC) and fairly present (subject, 
in the case of the unaudited statements, to normal audit adjustments) the 
financial position of Claire's and its consolidated subsidiaries as of the 
date thereof and the results of their operations and their cash flows for the 
periods then ended.  Except as set forth in the SEC Filings, Claire's has no
material liabilities or obligations of any nature required by GAAP to be set 
forth on a consolidated balance sheet of Claire's and its consolidated 
subsidiaries or in the notes thereto which individually or in the aggregate 
would have a Material Adverse Effect on Claire's. 

<PAGE>

2. 9 Absence of Certain Changes or Events.  Except as disclosed in the SEC
Filings filed prior to the date of this Agreement, and except as expressly 
contemplated by this Agreement, since the date of the most recently filed SEC 
Filings, Claire's has conducted its business only in the ordinary course, and 
there has not been:  (i) any Material Adverse Change in Claire's business, 
results of operations, or business prospects in the aggregate; (ii) any 
damage, destruction or loss, whether or not covered by insurance, that has 
had or is likely to have a Material Adverse Effect on Claire's in the 
aggregate; or (iii) any change in accounting methods, principles or practices 
by Claire's materially affecting its assets, liabilities or business, except 
insofar as may have been required by a change in GAAP.

2. 10     Litigation.  Except as disclosed in the SEC Filings prior to the 
date of this Agreement and except for any such action which may be commenced 
by or on behalf of Lux, the Shihs or the Stockholder, there is no suit, 
action or proceeding pending or threatened against Claire's or any of its 
subsidiaries challenging the acquisition by Claire's or Merger Sub of any 
shares of Lux or any provision of this Agreement or seeking to restrain or
prohibit the consummation of the Merger, or that, individually or in the 
aggregate, could reasonably be expected to have a Material Adverse Effect on
Claire's, nor is there any judgment, decree, injunction, rule or order of any 
Governmental Authority or arbitrator outstanding against Claire's or any of 
its subsidiaries having, or which would reasonably be expected to have, any 
such effect.

2. 11     Capitalization.  The authorized capital stock of Claire's consists 
of 50,000,000 shares of Claire's Common Stock, 20,000,000 shares of Class A 
Common Stock, par value $.05 per share, and 1,000,000 shares of Preferred 
Stock, par value $1.00 per share.  As of January 30, 1998, (i) 45,575,415 
shares of Claire's Common Stock were validly issued and outstanding, fully 
paid and non-assessable, (ii) 2,904,745 shares of Class A Common Stock were 
validly issued and outstanding, fully paid and non-assessable, and (iii) no 
shares of Preferred Stock were issued and outstanding.  The Claire's Shares 
to be issued in the Merger will be "voting stock" within the meaning of 
Section 368 of the Code.

                          ARTICLE  III
    REPRESENTATIONS AND WARRANTIES OF LUX, THE SHIHS AND THE
                          STOCKHOLDER
As a material inducement to each of the Claire's Companies to enter into this
Agreement and to consummate the transactions contemplated hereby, each of 
Lux, the Shihs and the Stockholder hereby, jointly and severally, make the 
following representations and warranties to Claire's Companies: 

3. 1 Corporate Status.  Lux is a corporation duly organized and validly
existing under the laws of the State of Washington and has the requisite 
power and authority to own or lease its properties and to carry on its business 
as now being conducted.  Lux is duly qualified and licensed to do business as 
a foreign corporation and is in good standing or validly existing in all 
jurisdictions that require such qualification or licensing, except for the
lack of qualification or licensing which, individually or in the aggregate, 
would not have a Material Adverse Effect on Lux.  All of the fictitious names 
under which Lux operates its business are set forth on Schedule 3.1 attached 
hereto.  Lux has fully complied with all of the requirements of any statute 
governing the use and registration of fictitious names, and has the
legal right to use the names under which it operates its business in all 
jurisdictions where it does so.  There is no pending or threatened proceeding 
for the dissolution, liquidation, insolvency or rehabilitation of Lux.

<PAGE>

3. 2 Power and Authority.  Each of Lux and the Stockholder has the power
and authority to execute and deliver this Agreement, to perform its 
obligations hereunder and to consummate the transactions contemplated hereby.  
Each of Lux and the Stockholder has taken all action necessary to authorize 
the execution and delivery of this Agreement, the performance of its 
obligations hereunder and the consummation of the transactions contemplated 
hereby.  Each of David, Eva and Douglas is a Person residing in the State of
Washington, and Daniel is a Person residing in the State of Massachusetts, 
and in each case such Person has the requisite competence and authority to 
execute and deliver this Agreement, to perform its respective obligations 
hereunder and to consummate the transactions contemplated hereby.  The Trust 
is a grantor trust formed under the laws of the State of Washington by David 
and Eva and each of Daniel and Douglas, as the co-trustees of
the Trust, have the power and authority to execute and deliver this 
Agreement, to cause the Trust to perform its respective obligations 
hereunder, and to consummate the transactions contemplated hereby.
 
3. 3 Enforceability.  This Agreement has been duly executed and delivered
by Lux, the Shihs and the Stockholder and constitutes the legal, valid and 
binding obligation of each of them, enforceable against each of them in 
accordance with its terms, except as the same may be limited by applicable 
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting 
the enforcement of creditors' rights generally and general equitable
principles regardless of whether such enforceability is considered in a 
proceeding at law or in equity.
 
3. 4 Capitalization; Changes in Equity Interests.  Lux has authorized 5,000
shares of Class A common stock (voting), with no par value per share, of 
which 100 shares are issued and outstanding as of the date hereof, and no 
shares of which are held in treasury.  Lux has authorized 5,000 shares of 
Class B common stock, with no par value per share, of which 1,900 shares are 
issued and outstanding as of the date hereof, and no shares of which
are held in treasury.  All of the issued and outstanding shares of capital 
stock of Lux (i) have been duly authorized and validly issued and are fully 
paid and non-assessable, (ii) were issued in compliance with all applicable 
state and federal securities laws, and (iii) were not issued in violation of 
any preemptive rights or rights of first refusal.  No rights of first refusal 
exist with respect to the shares of capital stock of Lux and no such rights 
arise by virtue of or in connection with the transactions contemplated 
hereby. There are no outstanding or authorized rights, options, warrants, 
convertible securities, subscription rights, conversion rights, exchange 
rights or other agreements or commitments of any kind that could require
Lux to issue or sell any shares of its capital stock (or securities 
convertible into or exchangeable for shares of its capital stock).  There are no
outstanding stock appreciation, phantom stock, profit participation or other
similar rights with respect to Lux.  There are no proxies, voting rights or 
other agreements or understandings with respect to the voting or
transfer of the capital stock of Lux.  Lux is not obligated to redeem or 
otherwise acquire any of its outstanding shares of capital stock. Except as 
set forth in Schedule 3.4 attached hereto, there have been no changes in 
equity interests of Lux during the past two (2) years.

<PAGE>

3. 5 Ownership of Lux and the Stockholder.  The Stockholder is the holder
of all issued and outstanding shares of capital stock of Lux as of the date 
hereof.  The Stockholder owns the shares of Lux Common Stock as of the date 
hereof, free and clear of all Liens, restrictions and claims of any kind.  As 
of the date hereof, the Shihs are the holders of all the membership interests 
in the Stockholder, and own such membership interests free and clear of all 
Liens, restrictions and claims of any kind.

3. 6 No Violation.  The execution and delivery of this Agreement by Lux, the
Shihs and the Stockholder, the performance by them of their respective 
obligations hereunder and the consummation by them of the transactions 
contemplated by this Agreement will not:

(a) contravene any provision of the Articles of Incorporation or By-laws 
of Lux; (b) violate or conflict with any law, statute, ordinance, rule, 
regulation, decree, writ, injunction, judgment or order of any Governmental 
Authority or of any arbitration award which is either applicable to, binding 
upon or enforceable against Lux, the Shihs, the Stockholder or any of
their respective Affiliates; (c) conflict with, result in any breach of, or 
constitute a default (or an event which would, with the passage of time or 
the giving of notice or both, constitute a default) under, or give rise to a 
right to terminate, amend, modify, abandon or accelerate, any Contract which 
is applicable to, binding upon or enforceable against Lux, the Shihs or the
Stockholder or any of their respective Affiliates; (d) result in or require 
the creation or imposition of any Lien upon or with respect to any of the 
property or assets of Lux, the Shihs, the Stockholder or any of their 
respective Affiliates; or (e) require the consent, approval, authorization or 
permit of, or filing with or notification to, any Governmental Authority, any
court or tribunal or any other Person, except any applicable filings required
under the HSR Act, and any SEC and other filings required to be made by 
Claire's or as otherwise set forth on Schedule 3.6 attached hereto.  No 
statute, regulation, rule or other law related to "control share 
acquisitions" or similar "antitakeover" legislation is applicable to the 
transactions contemplated by this Agreement. 

3. 7 Records of Lux.  The copies of the Articles of Incorporation and By-laws
of Lux which have been provided to Claire's are true, accurate and complete 
and reflect all amendments made through the date of this Agreement.  The 
minute books for Lux made available to Claire's for review were correct and 
complete in all material respects as of the date of such review, no further 
entries have been made through the date of this Agreement, such minute books 
contain the true signatures of the persons purporting to have signed them. 
All material corporate actions taken by Lux have been duly authorized or 
ratified.  The stock ledgers of Lux, as previously made available to 
Claire's, contain accurate and complete records of all issuances, transfers 
and cancellations of shares of the capital stock of Lux. 

<PAGE>

3. 8 Subsidiaries.  Except as set forth in Schedule 3.8 attached hereto, Lux
does not own, directly or indirectly, any outstanding voting securities of or 
other interests in, or control, any other corporation, partnership, joint 
venture or other business entity. 

3. 9 Financial Statements.  Schedule 3.9 attached hereto contains a copy of
the audited balance sheets of Lux and the related audited statements of 
income, cash flow and stockholders' equity, together with the notes thereto as 
at and for the fiscal years ended November 30, 1996 (the "1996 Financial 
Statements"), and November 30, 1997 (the "1997 Financial Statements").  The 
balance sheet of Lux included in the 1997 Financial Statements is referred to 
herein as the "Current Balance Sheet," and the 1996 Financial Statements and
1997 Financial Statements are referred to herein as the "Financial 
Statements."  The Financial Statements fairly present the financial position 
of Lux at each of the balance sheet dates and the results of operations and 
cash flows for the periods covered thereby, and have been prepared in 
accordance with GAAP consistently applied throughout the periods indicated.  
The books and records of Lux are sufficient to permit an audit in accordance 
withGAAP.  There are no extraordinary items of income or expense during the 
periods covered by the Financial Statements and the balance sheets included 
in the Financial Statements do not reflect any write up or revaluation 
increasing the book value of any assets. 

3. 10     Changes Since the Current Balance Sheet Date.  Since the date of the
Current Balance Sheet, Lux has not, except as set forth on Schedule 3.10 
attached hereto: (a) issued any capital stock or other securities; (b) made 
any distribution of or with respect to its capital stock or other securities
(which distributions are no greater than normal, are based on earnings and 
past dividend policy and patterns, or are not greater than the amount 
necessary to satisfy the current tax obligations (accrued or otherwise) of the 
Shihs and the Stockholder relating to the fiscal year ended November 30, 1997 
and the period through the Closing Date) or purchased or redeemed any of its 
securities; (c) paid any bonus to or increased the rate of compensation of 
any of its officers or salaried employees or amended any other terms of
employment of such persons, (d) sold, leased or transferred any of its 
properties or assets other than in the ordinary course of business consistent 
with past practice; (e) made or obligated itself to make capital expenditures 
of more than $50,000 other than for tenant improvements and equipment for new 
stores; (f) made any payment in respect of its liabilities other than in the 
ordinary course of business consistent with past practice; (g) incurred any
obligations or liabilities (including any indebtedness) or entered into any 
transaction out of the ordinary course of business, except for this Agreement 
and the transactions contemplated hereby; (h) suffered any theft, damage, 
destruction or casualty loss, not covered by insurance and for which a timely 
claim was filed (i) suffered any extraordinary losses (whether or not covered 
by insurance); (j) waived, canceled, compromised or released any rights having 
a value in excess of $10,000 in the aggregate; (k) made or adopted any change
in its accounting practice or policies; (l) made any adjustment to its books 
and records other than in respect of the conduct of its business activities 
in the ordinary course consistent with past practice; (m) entered into any 
transaction with any Affiliate; (n) entered into any written employment
agreement; (o) terminated, amended or modified any agreement out of the 
ordinary course of business; (p) imposed any security interest or other Lien 
on any of its assets other than in the ordinary course of business consistent 
with past practice; (q) delayed paying any accounts payable which are due and 
payable except to the extent being contested in good faith; (r) made or 
pledged any charitable contribution other than in the ordinary course of 
business consistent with past practice; (s) entered into any other 
transaction or been subject to any event which has or is likely to have a 
Material Adverse Effect on Lux; or (t) agreed to do or authorized any of the 
foregoing. 

<PAGE>

3. 11     Liabilities of Lux.  Lux does not have any liabilities or obligations,
whether accrued, absolute, contingent or otherwise of a nature customarily 
reflected in financial statements prepared in accordance with GAAP, except: 
(a) to the extent reflected or taken into account in the Current Balance 
Sheet and not heretofore paid or discharged; (b) to the extent specifically 
set forth in or incorporated by express reference in any of the Schedules 
attached hereto; (c) liabilities incurred in the ordinary course of business 
consistent with past practice since the date of the Current Balance Sheet 
(none of which relates to breach of contract, breach of warranty, tort, 
infringement or violation of law, or which arose out of any action, suit, 
claim, governmental investigation or arbitration proceeding); (d)normal 
year-end accruals (including, without limitation, reasonable accruals for 
workers' compensation claims), which would not be material in the aggregate, 
reclassifications and audit adjustments and any other reserves and accruals 
created with the approval of Claire's which would be reflected on an audited 
financial statement; (e) liabilities incurred in the ordinary course of 
business prior to the date of the Current Balance Sheet which, in
accordance with GAAP consistently applied, were not required to be recorded 
thereon and (f) leases being treated as operating leases and expenses rather 
than being treated as capital leases.  As of the Effective Time, Lux will not 
be liable for any indebtedness for borrowed money.  As of the Effective Time, 
the Adjusted Total Stockholders' Equity of Lux will be no less than 
$9,000,000.  As used herein, Adjusted Total Stockholders' Equity shall mean 
the total stockholders' equity of Lux determined in accordance with GAAP, 
consistently applied, but adjusted as follows (except to the extent such 
adjustments have already been reflected in total stockholders' equity of Lux): 

( a) The legal and accounting fees and costs and other costs, including, 
without limitation, fees or commissions due to Alexander Hutton, Inc. ("AHI") 
and HSR Act filing fees and attendant costs incurred by Lux in connection 
with this Agreement and the transactions contemplated hereby (which shall not 
exceed $630,000) shall be added back to Lux's total stockholders' equity;  and

( b) The following shall be added back to the extent deducted in the
recorded stockholders' equity:  (a) bonuses paid to the Shihs and related 
taxes in an aggregate amount not to exceed $700,000; (b) the amount of any 
distribution to the Shihs and the Stockholder as set forth on Schedule 3.10; 
and (c) any deferred tax liability, including the deferred tax liability, if 
any, created by termination of Lux's "S" election.

3. 12     Litigation.  Except as set forth on Schedule 3.12 attached hereto, 
there is no action, suit, or other legal or administrative proceeding or 
governmental investigation pending, or to the knowledge of the Shihs, Lux or 
the Stockholder threatened, anticipated or contemplated against, by or 
affecting Lux, or any of its properties or assets, or affecting the Shihs, 
Lux or the Stockholder, or which questions the validity or enforceability of 
this Agreement or the transactions contemplated hereby, and to the knowledge 
of the Shihs, Lux and the Stockholder, there is no basis for any of the 
foregoing. There are no outstanding orders, decrees or stipulations issued by 
any Governmental Authority in any proceeding to which Lux is or was a party 
which have not been complied with in full or which continue to
impose any material obligations on Lux. 

<PAGE>

3. 13     Environmental Matters.

( a) Except as set forth on Schedule 3.13 attached hereto, Lux (as
defined in clause (g) below) is and has at all times been in material 
compliance with all Environmental Laws (as defined in clause (g) below) 
governing its business, operations, properties and assets, including, without 
limitation: (i) all requirements relating to the Discharge (as defined in 
clause (g) below) and Handling (as defined in clause (g) below) of Hazardous 
Substances (as defined in clause (g) below) or other Waste (as defined in 
clause (g) below); (ii) all requirements relating to notice, record keeping and 
reporting; (iii) all requirements relating to obtaining and maintaining 
Licenses (as defined in clause (g) below) for the ownership of its properties 
and assets and the operation of its business as presently conducted, 
including Licenses relating to the Handling and Discharge of Hazardous
Substances and other Waste; and (iv) all applicable writs, orders, judgments, 
injunctions, governmental communications, decrees, informational requests or 
demands issued pursuant to, or arising under, any Environmental Laws. 

( b) There are no (and to Lux's, the Shihs' and the Stockholder's
knowledge there is no reasonable basis for any) non-compliance orders, 
warning letters, notices of violation (collectively "Notices"), claims, 
suits, actions, judgments, penalties, fines, or administrative or judicial 
investigations or proceedings (collectively "Proceedings") pending or 
threatened against or involving Lux, or its business, operations, properties, 
or assets, issued by any Governmental Authority or third party with respect 
to any Environmental Laws or Licenses issued to Lux thereunder in connection 
with, related to or arising out of the ownership by Lux of its properties or 
assets or the operation of its business, which have not been resolved to the 
satisfaction of the issuing Governmental Authority or third party in a manner 
that would not impose any obligation, burden or continuing liability on 
Claire's or the Surviving Corporation in the event that the transactions 
contemplated by this Agreement are consummated, or which could have a 
Material Adverse Effect on Lux, including, without limitation:  (i) Notices 
or Proceedings related to Lux being a potentially responsible party for a 
federal or state environmental cleanup site or for corrective action
under any applicable Environmental Laws; (ii) Notices or Proceedings in 
connection with any federal or state environmental cleanup site, or in 
connection with any real property or premises where Lux has transported, 
transferred or disposed of other Waste; (iii) Notices or Proceedings relating 
to Lux being responsible to undertake any response or remedial actions
or clean-up actions of any kind; or (iv) Notices or Proceedings related to 
Lux being liable under any Environmental Laws for personal injury, property 
damage, natural resource damage, or clean up obligations. 

( c) To Lux's, the Shihs' and the Stockholder's knowledge, except as
set forth on Schedule 3.13, Lux has not, in violation of any applicable 
Environmental Handled or Discharged, nor has it allowed or arranged for any 
third party to Handle or Discharge, Hazardous Substances or other Waste to, 
at or upon:  (i) any location other than a site lawfully permitted to receive 
such Hazardous Substances or other Waste; (ii) any real property currently or 
previously owned or leased by Lux; or (iii) any site which, pursuant to
any Environmental Laws, (x) has been placed on the National Priorities List 
(as defined in clause (g) below) or its state equivalent; or (y) the 
Environmental Protection Agency or the relevant state agency or other 
Governmental Authority has notified Lux that such Governmental Authority has 
proposed or is proposing to place on the National Priorities List (as defined 
in clause (g) below) or its state equivalent.  There has not occurred, nor is 
there presently occurring, a Discharge, or threatened Discharge, of any 
Hazardous Substance on, into or beneath the surface of, or adjacent to, any 
real property currently or previously owned or leased by Lux in an amount 
requiring a notice or report to be made to a Governmental Authority or in 
violation of any applicable Environmental Laws. 

<PAGE>

( d) Schedule 3.13 identifies the operations and activities, and
locations thereof, which have been conducted or are being conducted by Lux 
on any real property currently or previously owned or leased by Lux which 
have involved the Handling or Discharge of Hazardous Substances by Lux. 

( e) Except as set forth on Schedule 3.13, Lux does not use, nor has it
used, any Aboveground Storage Tanks (as defined in clause (g) below) or 
Underground Storage Tanks (as defined in clause (g) below), and to Lux's, the 
Shihs' and the Stockholder's knowledge there are not now nor have there ever 
been any Underground Storage Tanks beneath any real property currently or 
previously owned or leased by Lux that are required to be registered under 
applicable Environmental Laws. 

( f) Schedule 3.13 identifies:  (i) all environmental audits, assessments
or occupational health studies undertaken by Lux or its agents or, to the 
knowledge of Lux, undertaken by any Governmental Authority, or any third 
party, relating to or affecting Lux or any real property currently or 
previously owned or leased by Lux; (ii) the results of any ground, water, 
soil, air or asbestos monitoring undertaken by Lux or its agents or, to the
knowledge of Lux, undertaken by any Governmental Authority or any third 
party, relating to or affecting Lux or any real property currently or 
previously owned or leased by Lux which indicate the presence of Hazardous 
Substances at levels requiring a notice or report to be made to a 
Governmental Authority or in violation of any applicable Environmental Laws;
(iii) all material written communications between Lux and any Governmental 
Authority arising under or related to Environmental Laws; and (iv) to Lux's, 
the Shihs' and the Stockholder's knowledge all outstanding citations issued 
under OSHA, or similar state or local statutes, laws, ordinances, codes, 
rules, regulations, orders, rulings, or decrees, relating to or affecting 
either Lux or any real property currently or previously owned or leased by
Lux. 

<PAGE>

( g) For purposes of this Section 3.13, the following terms shall have
the meanings ascribed to them below: 

  "Aboveground Storage Tank" shall have the meaning ascribed to such term
  in Section 6901 et seq., as amended, of RCRA, or any applicable state or 
  local statute, law, ordinance, code, rule, regulation, order ruling, or 
  decree governing Aboveground Storage Tanks. 

  "Lux" means Lux and any Affiliates. 

  "Discharge" means any manner of spilling, leaking, dumping, discharging,
  releasing or emitting, as any of such terms may further be defined in any
  Environmental Law, into any medium including, without limitation, ground
  water, surface water, soil or air. 
 
  "Environmental Laws" means all federal, state, regional or local statutes,
  laws, rules, regulations, codes, orders, plans, injunctions, decrees, 
  rulings, and changes or ordinances or judicial or administrative 
  interpretation thereof, or similar laws of foreign jurisdictions where 
  Lux conducts business, any of which govern (or purport to govern) or relate 
  to pollution, protection of the environment, public health and safety, air 
  emissions, water discharges, hazardous or toxic substances, solid or 
  hazardous waste or occupational health and safety, as any of these terms 
  are defined in such statutes, laws, rules, regulations, codes, orders, 
  plans, injunctions, decrees, rulings and changes or ordinances, or judicial 
  or administrative interpretations thereof, including, without limitation: 
  the Comprehensive Environmental Response, Compensation and Liability Act of 
  1980, as amended by the Superfund Amendment and Reauthorization Act of 
  1986, 42 U.S.C. ss.9601, et seq. (collectively "CERCLA"); the Solid Waste 
  Disposal Act, as amended by the Resource Conservation and Recovery Act of 
  1976 and subsequent Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. 
  ss.6901 et seq. (collectively "RCRA"); the Hazardous Materials 
  Transportation Act, as amended, 49 U.S.C. ss.1801, et seq.; the Clean Water 
  Act, as amended, 33 U.S.C. ss.1311, et seq.; the Clean Air Act, as amended 
  (42 U.S.C. ss.7401-7642); the Toxic Substances Control Act, as amended, 15 
  U.S.C. ss.2601 et seq.; the Federal Insecticide, Fungicide, and Rodenticide 
  Act as amended, 7 U.S.C. ss.136-136y ("FIFRA"); the Emergency Planning and 
  Community Right-to-Know Act of 1986 as amended, 42 U.S.C. ss.11001, et seq. 
  (Title III of SARA) ("EPCRA"); and the Occupational Safety and Health Act 
  of 1970, as amended, 29 U.S.C. ss.651, et seq. ("OSHA"). 
  
  "Handle" means any manner of generating, accumulating, storing, treating,
  disposing of, transporting, transferring, labeling, handling, manufacturing 
  or using, as any of such terms may further be defined in any Environmental
  Law, of any Hazardous Substances or Waste. 
     
  "Hazardous Substances" shall be construed broadly to include any toxic or
  hazardous substance, material, or waste, and any other contaminant,
  pollutant or constituent thereof, whether liquid, solid, semi-solid, sludge
  and/or gaseous, including without limitation, chemicals, compounds, by-
  products, pesticides, asbestos containing materials, petroleum or petroleum
  products, and polychlorinated biphenyls, the presence of which requires
  
<PAGE>

  investigation or remediation under any Environmental Laws or which are
  regulated, listed or controlled by, under or pursuant to any Environmental
  Laws, including, without limitation, RCRA, CERCLA, the Hazardous
  Materials Transportation Act, the Toxic Substances Control Act, the Clean
  Air Act, the Clean Water Act, FIFRA, EPCRA and OSHA, or any similar
  state statute, or regulations implementing such statutes, laws, ordinances,
  codes, rules, regulations, orders, rulings, or decrees, or which has been
  determined or interpreted at any time by any Governmental Authority to be
  a hazardous or toxic substance regulated under any other statute, law,
  regulation, order, code, rule, order, or decree. 
 
  "Licenses" means all licenses, certificates, permits, approvals and
  registrations. 

  "National Priorities List" shall have the meaning ascribed to such term in
  Section 105 of CERCLA.

  "Underground Storage Tank" shall have the meaning ascribed to such term
  in Section 6901 et seq., as amended, of RCRA, or any applicable state or 
  local statute, law, ordinance, code, rule, regulation, order ruling, or 
  decree governing Underground Storage Tanks. 

  "Waste" shall be construed broadly to include agricultural wastes,
  biomedical wastes, biological wastes, bulky wastes, construction and
  demolition debris, garbage, household wastes, industrial solid wastes, 
  liquid wastes, recyclable materials, sludge, solid wastes, special wastes, 
  used oils, white goods, and yard trash as those terms are defined under any 
  applicable Environmental Laws. 

(h)  Any matters contained in any reports or studies referenced in
Schedule 3.13 which have not been delivered to Claire's environmental counsel 
prior to the date hereof shall not be deemed to be exceptions to the 
representations and warranties contained in this Section 3.13.  In addition, 
any reserves or accruals for environmental liabilities that may have been, or 
may be, created by Lux on its financial statements shall not reduce or affect 
any indemnification obligation under Section 9.1 hereof of the Stockholders
with respect to such representations and warranties. 

3. 14     Real Estate.

( a) Lux owns no real estate whatsoever.  Schedule 3.14(a) attached
hereto sets forth the street address of each parcel of real estate owned by 
any Affiliate of Lux as of the date hereof and utilized by Lux in its business 
(collectively, the "Owned Properties").  With respect to each parcel of Owned 
Properties: 

<PAGE>

( i) Affiliates have good and marketable title to each parcel of
Owned Properties, free and clear of any Lien other than: (x) liens for real 
estate taxes not yet delinquent; (y) recorded easements, covenants, and other 
restrictions which do not materially impair the current use or occupancy of 
the property subject thereto; and (z) encumbrances and restrictions, none of 
which materially impair the current use or occupancy, which are described in 
the title insurance policies relating to such properties which have been 
delivered to Claire's, and are listed on Schedule 3.14(a), or which are 
otherwise reflected in the Financial Statements and such other covenants, 
conditions, easements and exceptions to title as Claire's may approve in 
writing (collectively, the "Permitted Exceptions"); 

( ii)     There are no pending or threatened condemnation
proceedings, suits or administrative actions relating to any of the Owned 
Properties or other matters affecting adversely the current use or occupancy 
thereof; 

( iii)    To Lux's, the Shihs' and the Stockholder's knowledge, the
legal descriptions for the parcels of Owned Properties contained in the deeds 
thereof describe such parcels fully and adequately; the buildings and 
improvements are located within the boundary lines of the described parcels
of land, are not in material violation of applicable setback requirements, 
local comprehensive plan provisions, zoning laws and ordinances (and
none of the properties or buildings or improvements thereon are subject to 
"permitted non-conforming use" or "permitted non-conforming structure" 
classifications), building code requirements, permits, licenses or other 
forms of approval by any Governmental Authority, and do not encroach on any 
easement which may burden the land; the land does not serve any adjoining 
property for any purpose inconsistent with the use of the land; and the Owned
Properties are not located within any flood plain (such that a mortgagee 
would require a mortgagor to obtain flood insurance) or subject to any 
similar type restriction for which any permits or licenses necessary to the 
use thereof have not been obtained; 

( iv)     All facilities have received all approvals of Governmental
Authorities (including licenses and permits) required in connection with the 
ownership or operation thereof and have been operated and maintained in 
material compliance with applicable laws, ordinances, rules and regulations; 

( v) There are no Contracts granting to any party or parties
(other than Lux) the right of use or occupancy of any portion of the parcels of
Owned Properties; 

( vi)     Except as set forth in Schedule 3.14(a), there are no
outstanding options or rights of first refusal to purchase the parcels of 
Owned Properties, or any portion thereof or interest therein; 

( vii)    There are no parties (other than Lux) in possession of the
parcels of Owned Properties; 

( viii)   All facilities located on the parcels of Owned Properties
are supplied with utilities and other services necessary for the operation of 
such facilities, including gas, electricity, water, telephone, sanitary sewer 
and storm sewer, all of which services are adequate in accordance with all 
applicable laws, ordinances, rules and regulations, and are provided via 
public roads or via permanent, irrevocable, appurtenant easements benefiting 
the parcels of Owned Properties; 

<PAGE>

( ix)     Each parcel of Owned Properties abuts on and has direct,
or indirect through another Owned Properties, vehicular access to a public 
road, or has access to a public road via a permanent, irrevocable, 
appurtenant easement benefiting the parcel of Owned Properties; access to the 
property is provided by paved public right-of-way with adequate curb cuts 
available; and there is no pending or threatened termination of the
foregoing access rights; and 

( x) Neither Lux nor any Affiliate has received notice of: (a)
any condemnation proceeding with respect to any portion of any parcel of 
Owned Properties or any access thereto, and (to the knowledge of Lux and its 
Affiliates) no such proceeding is contemplated by any Governmental Authority; 
or (b) any special assessment which may affect any parcel of Owned Properties, 
and (to the knowledge of Lux and its Affiliates) no such special assessment 
is contemplated by any Governmental Authority. 

( b) Schedule 3.14(b) attached hereto sets forth a list of all leases,
licenses or similar agreements ("Leases") to which Lux is a party (copies of 
which have previously been furnished to Claire's), in each case, setting 
forth (A) the lessor and lessee thereof and the date and term of each of the 
Leases, and (B) the location of each property covered thereby (the "Leased 
Premises"), and (C) a brief description of the principal use of such property 
by Lux, if such use is other than as a retail store. The Leases are in full 
force and effect and have not been amended (except for amendments provided to 
Claire's) and no party thereto is in material default or breach under any 
such Lease. No event has occurred which, with the passage of time or the giving 
of notice or both, would cause a material breach of or default under any of 
such Leases. There is no material breach or anticipated breach by any other 
party to such Leases.  With respect to each such Leased Premises: 

      i)  Lux has valid leasehold interests in the Leased
Premises, free and clear of any Liens, easements or title defects of any 
nature whatsoever caused by Lux, and of any covenants except as set forth in 
the Leases provided to Claire's.

      ii) The Leased Premises that are used in the business
of Lux are in the aggregate sufficient to satisfy Lux's current normal 
business activities as conducted thereat; 

      iii)     Each of the Leased Premises: (a) is directly
accessible to the public during normal store business hours, such access 
being sufficient to satisfy the current and reasonably anticipated normal 
transportation requirements of Lux's business as presently conducted at such 
premises; and (b) is served by all utilities in such quantity and quality as 
are sufficient to satisfy the current normal business activities as conducted 
thereat; and 

<PAGE>

      iv) Lux has not received notice of: (a) any
condemnation proceeding with respect to any portion of the Leased Premises or 
any access thereto, and to Lux's, the Shihs' and the Stockholder's knowledge, 
no such proceeding is contemplated by any Governmental Authority; or (b) any 
special assessment which may affect any of the Leased Premises, and to Lux's, 
the Shihs' and the Stockholder's knowledge, no such special assessment is 
contemplated by any Governmental Authority. 

3. 15     Good Title to and Condition of Assets.

( a) Lux has good and marketable title to all of its Assets (as
hereinafter defined), free and clear of any Liens or restrictions on use 
except as set forth on Schedule 3.15 attached hereto or in the Leases. For 
purposes of this Agreement, the term "Assets" means all of the properties and 
assets of Lux, other than the Leased Premises, whether personal or mixed, 
tangible or intangible, wherever located. 

( b) The Fixed Assets (as hereinafter defined) taken as a whole
currently in use or necessary for the business and operations of Lux are in 
reasonable working condition for operations of the business. For purposes of 
this Agreement, the term "Fixed Assets" means all vehicles, machinery, 
equipment, tools, supplies, leasehold improvements, furniture and fixtures 
used by or located on the premises of Lux or set forth on the Financial
Statements or acquired by Lux since the date thereof.  Schedule 3.15 lists 
the vehicles owned, leased or used by Lux.  

3. 16     Compliance with Laws.
( a) To Lux's, the Shihs' and the Stockholder's knowledge, Lux is and
has been in material compliance with all laws, regulations and orders 
applicable to it, its business and operations (as conducted by it now and in 
the past), the Assets and the Leased Premises and any other properties and 
assets (in each case owned or used by it now or in the past).  Except for 
citations identified on Schedule 3.13, Lux has not been cited, fined or
otherwise notified of any asserted past or present failure to comply with any 
laws, regulations or orders (except where such failure to comply has been 
cured to the satisfaction of the relevant Governmental Authority), and no 
proceeding with respect to any such violation is pending or, to the knowledge 
of Lux or any of the Stockholders, threatened. 

( b) Neither Lux, nor any of its employees or agents, has made any
payment of funds in connection with the business of Lux which is prohibited 
by law, and no funds have been set aside to be used in connection with the 
business of Lux for any payment prohibited by law. 

( c) Lux is and at all times has been in material compliance with the
terms and provisions of the Immigration Reform and Control Act of 1986, as 
amended (the "Immigration Act").  With respect to each Employee (as defined 
in 8 C.F.R. 274a.1(f)) of Lux for whom compliance with the Immigration Act is 
required, Lux has on file a true, accurate and complete copy of:  (i) each
Employee's Form I-9 (Employment Eligibility Verification Form); and (ii) all 
other records, documents or other papers prepared, procured and/or
retained by Lux pursuant to the Immigration Act. Lux has not been cited, 
fined, served with a Notice of Intent to Fine or with a Cease and Desist Order, 
nor has any action or administrative proceeding been initiated or, to the 
knowledge of Lux or any of the Stockholder, threatened against Lux, by the 
Immigration and Naturalization Service by reason of any actual or alleged 
failure to comply with the Immigration Act. 

<PAGE>

( d) Lux is not subject to any Contract, decree or injunction to which
Lux is a party which restricts the continued operation of any business of Lux 
or the expansion thereof to other geographical areas, customers and suppliers 
or lines of business, except as set forth in the Leases provided to Claire's.

3. 17     Labor and Employment Matters.  Schedule 3.17 attached hereto sets
forth the name and current rate of compensation of the employees of Lux 
having an annual base salary in excess of $50,000.  Lux is not a party to or 
bound by any collective bargaining agreement or any other agreement with a 
labor union.  To Lux's, the Shihs' and the Stockholder's knowledge, there has 
been no effort by any labor union during the 24 months prior to the date 
hereof to organize any employees of Lux into one or more collective
bargaining units.  There is no pending or, to the knowledge of the Shihs, Lux 
and the Stockholder, threatened labor dispute, strike or work stoppage which 
affects or which may affect the business of Lux or which may interfere with its 
continued operations.  To Lux's, the Shihs' and the Stockholder's knowledge, 
neither Lux nor any agent, representative or employee thereof has within the 
last 24 months committed any unfair labor practice as defined in the National 
Labor Relations Act, as amended, and there is no pending or threatened charge 
or complaint against Lux by or with the National Labor Relations Board or any 
representative thereof.  There has been no strike, walkout or work stoppage 
involving any of the employees of Lux during the 24 months prior to the date 
hereof. Neither Lux, the Shihs nor the Stockholder are aware that any 
executive or key employee or group of employees has any plans to terminate 
his, her or their employment with Lux as a result of the Merger or otherwise; 
provided, however, that a decision to move certain of Lux's operations
from Washington may result in termination of employment of certain employees 
by Lux or by those employees. Schedule 3.17 identifies each contract, 
agreement or plan of the following nature, whether formal or informal, and 
whether or not in writing, to which Lux is a party or under which it has an 
obligation: (a) employment agreements; (b) employee handbooks, policy 
statements and similar plans; (c) non-competition agreements; and 
(d) consulting agreements.  To Lux's, the Shihs' and the Stockholder's 
knowledge, Lux has complied in all material respects with applicable federal 
and state laws, rules and regulations relating to employment, civil rights 
and equal employment opportunities, including but not limited to,
the Civil Rights Act of 1964, as amended, the Fair Labor Standards Act, and 
the Americans with Disabilities Act, as amended. 

<PAGE>

3. 18     Employee Benefit Plans.
( a) Employee Benefit Plans.  Schedule 3.18 attached hereto contains
a list setting forth each employee benefit plan or arrangement of Lux, 
including but not limited to employee pension benefit plans, as defined in 
Section 3(2) of the Employee Retirement Income Security Act of 1974, as 
amended ("ERISA"), multiemployer plans, as defined in Section 3(37) of ERISA, 
employee welfare benefit plans, as defined in Section 3(1) of ERISA, deferred 
compensation plans, stock option plans, bonus plans, stock purchase
plans, hospitalization, disability and other insurance plans, severance or 
termination pay plans and policies, whether or not described in Section 3(3) 
of ERISA, in which employees, their spouses or dependents, of Lux participate 
(collectively, "Employee Benefit Plans") (true and accurate copies of which, 
together with the most recent annual reports on Form 5500 and
summary plan descriptions with respect thereto, were furnished to Claire's). 

( b) Compliance with Law.  To Lux's, the Shihs' and the
Stockholder's knowledge, with respect to each Employee Benefit Plan: 
(i) except for routine benefit claims, each has been administered in all 
material respects in compliance with its terms and with all applicable laws, 
including, but not limited to, ERISA and the Code; (ii) no
actions, suits, claims or disputes are pending, or, to the knowledge of Lux, 
the Shihs or the Stockholder, threatened; (iii) no audits, inquiries, reviews, 
proceedings, claims, or demands are pending with any governmental or 
regulatory agency; (iv) except for routine benefit claims, there are no facts 
which could give rise to any material liability in the event of any
such investigation, claim, action, suit, audit, review, or other proceeding; 
(v) all material reports, returns, and similar documents required to be filed 
with any governmental agency or distributed to any plan participant have been 
duly or timely filed or distributed; and (vi) no non-exempt "prohibited 
transaction" has occurred within the meaning of the applicable provisions of 
ERISA or the Code. 

( c) Qualified Plans.  With respect to each Employee Benefit Plan
intended to qualify under Code Section 401(a), or 403(a) (i) the Internal 
Revenue Service has issued a favorable determination letter, true and correct 
copies of which have been furnished to Claire's, that such plans are 
qualified and exempt from federal income taxes; (ii) no such determination 
letter has been revoked nor has revocation been threatened, nor has any
amendment or other action or omission occurred with respect to any such plan 
since the date of its most recent determination letter or application 
therefor in any respect which would adversely affect its qualification or 
materially increase its costs; (iii) no such plan has been amended in a 
manner that would require security to be provided in accordance with Section
401(a)(29) of the Code; (iv) no reportable event (within the meaning of 
Section 4043 of ERISA) has occurred, other than one for which the 30-day 
notice requirement has been waived; (v) as of the Effective Time, the present 
value of all liabilities that would be "benefit liabilities" under Section 
4001(a)(16) of ERISA if benefits described in Code Section 411(d)(6)(B) were 
included will not exceed the then current fair market value of the assets of
such plan (determined using the actuarial assumptions used for the most 
recent actuarial valuation for such plan); (vi) all contributions to, and 
payments from and with respect to such plans, which may have been required to 
be made in accordance with such plans and, when applicable, Section 302 of 
ERISA or Section 412 of the Code, have been timely made; and (vii) all such 
contributions to the plans, and all payments under the plans (except those to 
be made from a trust qualified under Section 401(a) of the Code) and all 
payments with respect to the plans (including, without limitation, PBGC (as 
defined below in clause (f)) insurance premiums) for any period ending before 
the Effective Time that are not yet, but will be, required to be made are 
properly accrued and reflected on the Current Balance Sheet. 

( d) Multiemployer Plans.  With respect to any multiemployer plan,
as described in Section 4001(a)(3) of ERISA ("MPPA Plan"): (i) all 
contributions required to be made with respect to employees of Lux have been 
timely paid; (ii) Lux has not incurred or is not expected to incur, directly 
or indirectly, any withdrawal liability under ERISA with respect to any such 
plan (whether by reason of the transactions contemplated by the
Agreement or otherwise); (iii) Schedule 3.18 sets forth (A) the withdrawal 
liability under ERISA to each MPPA Plan, (B) the date as of which such amount 
was calculated, and (C) the method for determining the withdrawal liability; 
and (iv) no such plan is (or is expected to be) insolvent or in 
reorganization and no accumulated funding deficiency (as defined in Section
302 of ERISA and Section 412 of the Code), whether or not waived, exists or 
is expected to exist with respect to any such plan. 

( e) Welfare Plans.
   ( i) Lux is not obligated under any employee welfare benefit
plan as described in Section 3(1) of ERISA ("Welfare Plan") to provide 
medical or death benefits with respect to any employee or former employee of 
Lux or its predecessors after termination of employment; 

   ( ii)     To Lux's, the Shihs' and the Stockholder's knowledge,
Lux has complied with the notice and continuation coverage requirements of 
Section 4980B of the Code and the regulations thereunder with respect to each 
Welfare Plan that is, or was during any taxable year for which the statute of 
limitations on the assessment of federal income taxes remains open, by 
consent or otherwise, a group health plan within the meaning of Section 
5000(b)(1) of the Code; and 

   ( iii)    There are no reserves, assets, surplus or prepaid premiums
under any Welfare Plan which is an Employee Benefit Plan. Except for routine 
benefit claims, the consummation of the transactions contemplated by this 
Agreement will not entitle any individual to severance pay, and, will not 
accelerate the time of payment or vesting, or increase the amount of 
compensation, due to any individual. 

( f) Controlled Group Liability.  Neither Lux, nor any entity that
would be aggregated with it under Code Section 414(b), (c), (m) or (o): (i) 
has  ever terminated or withdrawn from any employee benefit plan under 
circumstances resulting (or expected to result) in liability to the Pension 
Benefit Guaranty Corporation ("PBGC"), the fund by which the employee benefit 
plan is funded, or any employee or beneficiary for whose benefit the plan is 
or was maintained (other than routine claims for benefits); (ii) has any
assets subject to (or expected to be subject to) a lien for unpaid 
contributions to any employee benefit plan; (iii) has failed to pay premiums 
to the PBGC when due; (iv) is subject to (or expected to be subject to) an 
excise tax under Code Section 4971; (v) has engaged in any transaction which 
would give rise to liability under Section 4069 or Section 4212(c) of ERISA;
or (vi) has violated Code Section 4980B or Section 601 through 608 of ERISA. 

<PAGE>

( g) Other Liabilities.  

   ( i) None of the Employee Benefit Plans obligates Lux to pay
separation, severance, termination or similar benefits solely as a result of 
any transaction
contemplated by this Agreement or solely as a result of a "change of control" 
(as such term is defined in Section 280G of the Code); 
   ( ii)     all required or discretionary (in accordance with historical
practices) payments, premiums, contributions, reimbursements, or accruals for 
all periods ending prior to or as of the Effective Time shall have been made 
or properly accrued on the Current Balance Sheet or will be properly accrued 
on the books and records of Lux as of the Effective Time; and 
   ( iii)    none of the Employee Benefit Plans has any unfunded
liabilities which are not reflected on the Current Balance Sheet or the books 
and records of Lux. 

3. 19     Tax Matters.  All Tax Returns  required to be filed prior to the 
date hereof with respect to Lux or any of its income, properties, franchises 
or operations have been timely filed, each such Tax Return has been prepared 
in compliance with all applicable laws and regulations, and all such Tax 
Returns are true and accurate in all material respects.  All Taxes due and 
payable by or with respect to Lux have been paid and all taxes accrued, but
not due and payable, are accrued on the Current Balance Sheet or will be 
accrued on its books and records as of the Closing.  All Tax Returns required 
to be filed with respect to Lux or any of its income, properties, franchises 
or operations on or before the Effective Time shall be filed when due and all 
taxes due thereon shall be paid when due.  Except as set forth in Schedule 
3.19 attached hereto: (i) no Tax Return has been audited by the relevant 
taxing authority within the last four years; (ii) no deficiency or proposed 
adjustment which has not been settled or otherwise resolved for any amount of 
Taxes  has been asserted or assessed by any taxing authority against Lux; 
(iii) Lux has not consented to extend the time in which any Taxes may be 
assessed or collected by any taxing authority; (iv) Lux has not requested or
been granted an extension of the time for filing any Tax Return to a date 
later than the Effective Time; (v) there is no action, suit, taxing authority 
proceeding, or audit or claim for refund now in progress, pending or 
threatened against or with respect to Lux regarding Taxes; (vi) Lux has not 
made an election or filed a consent under Section 341(f) of the Code
(or any corresponding provision of state, local or foreign law) on or prior 
to the Effective Time; (vii) there are no Liens for Taxes (other than for 
current Taxes not yet due and payable) upon the assets of Lux; (viii) Lux 
will not be required (A) as a result of a change in method of accounting for 
a taxable period ending on or prior to the Effective Time, to include
any adjustment under Section 481(c) of the Code (or any corresponding 
provision of state, local or foreign law) in taxable income for any taxable 
period (or portion thereof) beginning after the Effective Time or (B) as a 
result of any "closing agreement," as described in Section 7121 of the Code 
(or any corresponding provision of state, local or foreign law), to include 

<PAGE>

any item of income or exclude any item of deduction from any taxable period 
(or portion thereof) beginning after the Effective Time; (ix) after validly 
filing its election in 1996 for "S" corporation status under the Code, Lux 
has not been a member of an affiliated group (as defined in Section 1504 of 
the Code) or filed or been included in a combined, consolidated or
unitary income Tax Return; (x) Lux is not a party to or bound by any tax 
allocation or tax sharing agreement or has any current or potential 
contractual obligation to indemnify any other Person with respect to Taxes; 
(xi) to Lux's, the Shihs' and the Stockholder's knowledge, no taxing 
authority will claim or assess any additional Taxes against Lux for any 
period for which Tax Returns have been filed; (xii) Lux has not made any 
payments, and will not become obligated (under any contract entered into on 
or before the Effective Time) to make any payments, that will be non-
deductible under Section 280G of the Code (or any corresponding provision of 
state, local or foreign law); (xiii) Lux has not been a United States
real property holding corporation within the meaning of Section 897(c)(2) of 
the Code (or any corresponding provision of state, local or foreign law) 
during the applicable period specified in Section 897(c)(1)(a)(ii) of the 
Code (or any corresponding provision of state, local or foreign law); (xiv) 
no claim has ever been made by a taxing authority in a jurisdiction where
Lux does not file Tax Returns that it is or may be subject to Taxes assessed 
by such jurisdiction; and (xv) Lux does not have any permanent establishment 
in any foreign country, as defined in the relevant tax treaty between the 
United States of America and such foreign country; (xvi) true, correct and 
complete copies of all income, payroll, property and sales Tax Returns filed 
by or with respect to Lux for the past five years have been furnished or made
available to Claire's; (xvii) Lux will not be subject to any Taxes for the 
period ending at the Effective Time for any period for which a Tax Return has 
not been filed imposed pursuant to Section 1374 or Section 1375 of the Code 
(or any corresponding provision of state, local or foreign law); and (xviii) 
no sales or use tax, non-recurring intangibles tax, documentary stamp
tax or other excise tax (or comparable tax imposed by any governmental 
entity) will be payable by Claire's by virtue of the transactions completed 
in this Agreement. 

3. 20     Insurance.  Lux is covered by valid, outstanding and enforceable 
policies of insurance covering its respective properties, assets and 
businesses against risks of the nature normally insured against by 
corporations in the same or similar lines of business and in coverage amounts 
reasonable in light of Lux's historical claims experience (the "Insurance
Policies").  Such Insurance Policies are in full force and effect, and all 
premiums due thereon have been paid. As of the Effective Time, each of the 
Insurance Policies will be in full force and effect.  None of the Insurance 
Policies will lapse or terminate as a result of the transactions contemplated 
by this Agreement. Lux has complied in all material respects with the 
provisions of such Insurance Policies.  Lux has not failed to give, in a 
timely manner, any notice required under any of the Insurance Policies to 
preserve its rights thereunder. 

3. 21     Receivables.  All of the Receivables (as hereinafter defined) are 
valid and legally binding, represent bona fide transactions and arose in the 
ordinary course of business of Lux.  All of the Receivables are good and 
collectible receivables, without setoff or counterclaims, subject to the 
allowance for doubtful accounts, if any, set forth on the Current
Balance Sheet as reasonably adjusted since the date of the Current Balance 
Sheet in the ordinary course of business consistent with past practice. For 

<PAGE>

purposes of this Agreement, the term "Receivables" means all receivables of
Lux, including, without limitation, all trade account receivables arising 
from the provision of services, sale of inventory, notes receivable,
and insurance proceeds receivable. 

3. 22     Licenses and Permits.  Lux possesses all material licenses and 
required governmental or official approvals, permits or authorizations 
(collectively, the "Permits") for its business and operations, including with 
respect to the operation of each of the Leased Premises. All such Permits are 
valid and in full force and effect, Lux is in full compliance with the 
respective requirements thereof, and no proceeding is pending or, to the 
knowledge of Lux or any of the Shihs or the Stockholder, threatened to revoke 
or amend any of them. None of such Permits is or will be impaired or in any 
way affected by the execution and delivery of this Agreement or the 
consummation of the transactions contemplated hereby. 

3. 23     Adequacy of the Assets; Relationships with Customers and Suppliers;
Affiliated Transactions.  The Assets, Owned Properties and Leased Premises 
constitute, in the aggregate, all of the assets and properties necessary for 
the conduct of the business of Lux in the manner in which and to the extent 
to which such business is currently being conducted. No current supplier to 
Lux of items essential to the conduct of its business has threatened to
terminate its business relationship with it for any reason.  Lux does not 
have any direct or indirect interest in any customer, supplier or competitor 
of Lux, or in any person from whom or to whom Lux leases real or personal 
property as of the date hereof and, except for the Lease entered into by Lux 
as lessee and the Shih Family Limited Partnership, as lessor, relating to the 
warehouse and office property, no officer, director or stockholder of Lux, 
nor any person related by blood or marriage to any such person, nor any
entity in which any such person owns any beneficial interest, is a party to 
any Contract or transaction with Lux or has any interest in any property used 
by Lux as of the date hereof. 

3. 24     Intellectual Property.  Schedule 3.24 attached hereto lists 
(including registration numbers) all trademarks, service marks, trade names, 
copyrights and patents which Lux has full legal right, title and interest in 
and to, or the right to use.  In addition to the items listed in Schedule 
3.24, Lux has full legal right, title and interest in and to, or the
right to use all know-how, trade secrets, licenses (including licenses for 
the use of computer software programs) as well as all other intellectual 
property used in the conduct of its business (collectively, the "Intellectual 
Property").  To Lux's, the Shihs' and the Stockholder's knowledge, the 
conduct of the business of Lux as presently conducted, and such conduct and
such use and exploitation of the Intellectual Property, does not infringe or 
misappropriate in any material respect any rights held or asserted by any 
Person, and no Person is infringing on the Intellectual Property.  No 
payments are required for the continued use of the Intellectual Property.  
None of the Intellectual Property has ever been declared invalid or 
unenforceable, or is the subject of any pending or, to the knowledge of Lux, 
the Shihs or the Stockholder, threatened action for opposition, cancellation, 
declaration, infringement, or invalidity, unenforceability or 
misappropriation or like claim, action or proceeding. 

3. 25     Contracts.  Schedule 3.25 attached hereto sets forth a list of each
Contract to which Lux is a party or by which it or its properties and assets 
are bound and which is material to its business, assets, properties or 
prospects (the "Designated Contracts"), true and correct copies of which have 
been provided to Claire's.  The copy of each Designated Contract furnished to 

<PAGE>

Claire's is a true and complete copy of the document it purports to
represent and reflects all amendments thereto made through the date of this 
Agreement.  Lux has not violated any of the material terms or conditions of 
any Designated Contract or any term or condition which would permit 
termination or material modification of any Designated Contract, and all of 
the material covenants to be performed by any other party thereto have been 
performed in all material respects and there are no claims for breach or
indemnification or notice of default or termination under any Designated 
Contract.  No event has occurred which constitutes, or after notice or the 
passage of time, or both, would constitute, a material default by Lux under 
any Designated Contract, and to the knowledge of Lux, the Shihs and the 
Stockholder, no such event has occurred which constitutes or would
constitute a material default by any other party.  Except as set forth in 
Schedule 3.14(b) with respect to certain leases identified therein, Lux is 
not subject to any liability or payment resulting from renegotiation of 
amounts paid it under any Designated Contract.  As used in this Section, 
Designated Contracts shall include, without limitation: (a) loan agreements,
indentures, mortgages, pledges, hypothecations, deeds of trust, conditional 
sale or title retention agreements, security agreements, equipment financing 
obligations or guaranties, or other sources of contingent liability in 
respect of any indebtedness or obligations to any other Person, or letters of 
intent or commitment letters with respect to same; (b) contracts obligating 
Lux to provide products or services for a period of one year or more; (c) 
leases of real property, and leases of personal property not cancelable 
without penalty on notice of sixty (60) days or less or calling for payment 
of an annual gross rental exceeding $30,000; (d) distribution, sales agency 
or franchise or similar agreements, or agreements providing for an
independent contractor's services, or letters of intent with respect to same; 
(e) employment agreements, management service agreements, consulting 
agreements, confidentiality agreements, non-competition agreements and any 
other agreements relating to any employee, officer or director of Lux; (f) 
licenses, assignments or transfers of trademarks, trade names, service marks, 
patents, copyrights, trade secrets or know how, or other agreements regarding
proprietary rights or intellectual property; (g) any Contract relating to 
pending capital expenditures by Lux; and (h) other material Contracts or 
understandings, irrespective of subject matter and whether or not in writing, 
not entered into in the ordinary course of business by Lux and not otherwise 
disclosed on the Schedules attached hereto. 

3. 26     Significant Customers.  No customer of Lux individually accounted 
for more than 0.1% of Lux's annual revenue for the fiscal years ended 
November 30, 1996 or November 30, 1997. 

3. 27     Accuracy of Information Furnished.  No representation, statement or
information made or furnished by Lux, the Shihs or the Stockholder to 
Claire's or any of Claire's representatives in this Agreement and the various 
Schedules attached hereto and the other information and statements referred 
to herein and previously furnished by Lux, the Shihs and the Stockholder, 
knowingly contains or shall knowingly contain any untrue statement of a 
material fact or omits or shall omit any material fact necessary to make the
information contained therein not misleading.  Lux, the Shihs or the 
Stockholder have provided Claire's with true, accurate and complete copies of 
all documents listed or described in the various Schedules attached hereto 
(except for the items set forth on Schedule 3.13). 

<PAGE>

3. 28     Investment Intent; Accredited Investor Status; Securities Documents. 
The Stockholder is acquiring the Claire's Shares hereunder for its own account 
for investment and not with a view to, or for sale in connection with, any 
distribution of any of the Claire's Shares, except in compliance with 
applicable state and federal securities laws.  The Stockholder has not agreed 
to act with any Person as a group within the meaning of Section 13(d)(3) of 
the Exchange Act with respect to holding, voting or disposing of the
Claire's Shares. Each of the Shihs and the Stockholder has had the 
opportunity to discuss the transactions contemplated hereby with Claire's and 
has had the opportunity to obtain such public information pertaining to the 
Claire's Companies as has been requested, including but not limited to SEC 
filings.  Each of the Shihs and the Stockholder is an "accredited investor"
within the meaning of Regulation D promulgated under the Securities Act, and 
has such knowledge and experience in business or financial matters that it is 
capable of evaluating the merits and risks of an investment in the Claire's 
Shares. 

3. 29     Bank Accounts; Business Locations.  Schedule 3.29 attached hereto 
sets forth all accounts of Lux with any bank, broker or other depository 
institution, and the names of all persons authorized to withdraw funds from 
each  such account.  As of the date hereof, Lux has no office or place of 
business other than as identified on Schedules 3.14(a) and 3.14(b) and Lux's 
principal places of business and principal executive offices are indicated on
Schedules 3.14(a) or  3.14(b) and all locations where the equipment, 
inventory, chattel paper and books and records of Lux is  located as of the 
date hereof are fully identified on Schedules 3.14(a) and 3.14(b). 

3. 30     Names; Prior Acquisitions.  Lux has not changed its name or used any
assumed or fictitious name except as set forth on Schedule 3.1, nor has it 
been the surviving entity in a merger, acquired any business or changed its 
principal place of business or principal executive office, within the past 
three years. 

3. 31     No Commissions.  Except for the obligation in favor of AHI, neither 
Lux nor the Shihs nor the Stockholder have incurred any obligation for any 
finder's or broker's or agent's fees or commissions or similar compensation 
in connection with the transactions contemplated hereby.  The obligation in 
favor of AHI shall be paid by Lux.

3. 32     Certain Accounting Matters.  Neither Lux nor the Stockholder, nor 
any of their respective Affiliates, has knowingly taken or agreed to take any 
action that (without regard to any action taken or agreed to be taken by 
Claire's or any of its Affiliates) would prevent Claire's from accounting for 
the transactions contemplated hereby as a pooling of interest business 
combination. 

3. 33     Inventory.  All inventories (collectively referred to as 
"inventory" or "inventories") of Lux reflected on the Current Balance Sheet 
consist of items of quality and quantity and salable in the ordinary course 
of business as of the date of the Current Balance Sheet except to the extent 
that the Current Balance Sheet reflects adequate provisions or adjustments 
for excess inventory, slow-moving inventory and inventory obsolescence and
shrinkage at the lower of cost or realizable or current market value in 
accordance with GAAP, provided that such provisions or adjustments do not 
exceed $350,000 in the aggregate.  The values at which inventories are 
carried on the Current Balance Sheet reflect the normal inventory valuation 

<PAGE>

policy of Lux, as applicable, in accordance with GAAP and on a basis
consistent with that of preceding periods, of stating inventory at the lower 
of cost or market value.  To the knowledge of Lux, the Shihs and the 
Stockholder, there is no reason to believe that Lux will experience in the 
foreseeable future any difficulty in obtaining, in the desired
quantity and quality, the inventory necessary to conduct its business in the 
manner now conducted, including, without limitation, inventory which 
historically has been imported.  All items included in the inventories are 
the property of Lux and no items included in the inventories have been 
pledged as collateral or are held by Lux on consignment from others. 
The value of inventory reflected on the Current Balance Sheet was based upon 
physical inventory counts conducted in connection with the preparation and 
audit of the Current Balance Sheet.  In connection with the preparation of 
the Current Balance Sheet, individual items, and types or categories of 
items, were or will be included in such inventory in a manner consistent with 
Lux's past practice and are valued at the lower of cost or market value and 
on a basis consistent with that of prior years.  The reserves shown on the 
Current Balance Sheet are adequate, appropriate and reasonable.
                             

                           ARTICLE  IV
              CONDUCT OF BUSINESS PENDING THE MERGER

4. 1 Conduct of Business by Lux, the Shihs and the Stockholder Pending the
Merger.  Each of Lux, the Shihs and the Stockholder hereby, jointly and 
severally, covenants and agrees that, between the date of this Agreement and 
the Effective Time, Lux shall operate its business only in the ordinary 
course consistent with past practice and will not enter into any 
extraordinary agreements or transactions.  Lux, the Shihs and the 
Stockholder shall use their respective best efforts to preserve intact Lux's 
business organization, to keep available the services of its current 
officers, employees and consultants, and to preserve its present 
relationships with customers, suppliers and other persons with which it has 
significant business relations.  By way of amplification and not limitation, 
except as contemplated by this Agreement, Lux shall not, between the date of 
this Agreement and the Effective Time, directly or indirectly, do or propose 
or agree to do any of the following absent prior consultation with
Claire's and receipt of Claire's written consent (which written consent shall 
be deemed to be automatically given if Claire's fails to respond to Lux within 
five (5) business days of any such consultation):

( a) amend or otherwise change its Articles of Incorporation or By-
Laws; 

( b) (i) issue, sell, pledge, dispose of, or encumber, or, authorize the
issuance, sale, pledge, disposition, or encumbrance of any shares of its 
capital stock of any class, or any options, warrants, convertible securities or 
other rights of any kind to acquire any shares of such capital stock, or any 
other ownership interest, of it; or (ii) sell, pledge, dispose of, or 
encumber, or authorize the sale, pledge, disposition or encumbrance of its
assets, tangible or intangible, except in the ordinary course of business 
consistent with pastpractice;

<PAGE>
 

( c) declare, set aside, make or pay any dividend or other distribution, 
payable in cash, stock, property or otherwise, with respect to any of its 
capital stock (except to the extent that any such dividend or distribution is 
no greater than normal, is based upon earnings and past dividend policy and 
patterns of Lux, or is no greater than the amount necessary to satisfy the 
current tax obligations (accrued or otherwise) of the Shihs and the 
Stockholder relating to the fiscal year ended November 30, 1997 and the 
period through the Closing Date) or pay any bonuses to the Shihs or the 
Stockholder; 

( d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock; 

( e) (i) acquire (including, without limitation, for cash or shares of
stock, by merger, consolidation, or acquisition of stock or assets) any 
interest in any corporation, partnership or other business organization or 
division thereof or any assets, or make any investment either by purchase of 
stock or securities, contributions of capital or property transfer, or, 
except in the ordinary course of business, consistent with past practice,
purchase any property or assets of any other Person; (ii) incur any 
indebtedness for borrowed money or issue any debt securities or assume, 
guarantee or endorse or otherwise as an accommodation become responsible for, 

the obligations of any Person, or make any loans or advances; or (iii) enter 
into any Contract other than in the ordinary course of business,
consistent with past practice; 

( f) make any capital expenditures in excess of $50,000 in the
aggregate, other than for tenant improvements and equipment for new stores 
(unless any such expenditures are set forth on Schedule 4.1(f) attached 
hereto);

( g) increase the compensation payable or to become payable, or
make any bonus payments, to its executive officers or salaried employees, or, 
except as presently bound to do, change the employment conditions of any 
salaried employee, grant any severance or termination pay to, or enter into 
any employment or severance agreement with, any of its directors, officers, 
or salaried personnel or establish, adopt, enter into or amend or
take any action to accelerate any rights or benefits with regard to any 
collective bargaining, bonus, profit sharing, trust, compensation, stock 
option, restricted stock, pension, retirement, deferred compensation, 
employment, termination, severance or other plan, agreement, trust,
fund, policy or arrangement for the benefit of any directors, officers, 
supervisory personnel oremployees; 

( h) take any action other than in the ordinary course of business and
in a manner consistent with past practice with respect to accounting policies 
or procedures; 

( i) pay, discharge or satisfy any existing trade payables, accrued
expenses, claims, liabilities or obligations (absolute, accrued, asserted or 
unasserted, contingent or otherwise), other than the payment, discharge or 
satisfaction in the ordinary course of business and consistent with past 
practice of due and payable liabilities reflected or reserved against in the 
Financial Statements, as appropriate, or liabilities incurred after the
date of the Current Balance Sheet in the ordinary course of business and 
consistent with past practice; 

<PAGE>

( j) collect accounts receivables and purchase or produce inventory
other than in the ordinary course of business and consistent with past 
practice;

( k) increase or decrease prices charged to its customers, other than
in the ordinary course of business consistent with past practice, or take any 
other action which might reasonably adversely affect the financial condition 
and business prospects of Lux; 

( l) enter into any transaction with an Affiliate, whether or not in the
ordinary course of business; 

( m) change its existing accounting policies or procedures;

( n) undertake any unusual or long term contractual purchase
commitments;

( o) enter into any long term leases other than store leases, and then
only with terms not in excess of 10 lease years; or 

( p) agree, in writing or otherwise, to take or authorize any of the
foregoing actions or any action which would make any representation or 
warranty in Article III hereof untrue or incorrect. 
                    
                          ARTICLE  V
                     ADDITIONAL AGREEMENTS

5. 1 Further Assurances.  Each party shall execute and deliver such
additional instruments and other documents and shall take such further 
actions as may be necessary or appropriate to effectuate, carry out and 
comply with all of the terms of this Agreement and the transactions 
contemplated hereby. 

5. 2 Compliance with Covenants.  The Shihs and the Stockholder shall cause
Lux to comply with all of the respective covenants of Lux under this 
Agreement. 

5. 3 Cooperation.  Each of the parties hereto agrees to cooperate with the
other in the preparation and filing of all forms, notifications, reports and 
information, if any, required or reasonably deemed advisable pursuant to any 
law, rule or regulation, including the rules of the NYSE, the exchange on 
which the Claire's Common Stock is listed, in connection with the 
transactions contemplated by this Agreement and to use their respective
best efforts to agree jointly on a method to overcome any objections by any 
Governmental Authority to any such transactions. 

<PAGE>

5. 4 HSR Act and Other Actions.  Each of the parties hereto shall:  (a) make
promptly (and in no event later than five (5) business days following the date 
hereof) its respective filings, and thereafter make any other required 
submissions, under the HSR Act, with respect to the transactions contemplated 
hereby; and (b) use its reasonable best efforts to take, or cause to be 
taken, all appropriate actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to 
consummate and make effective the transactions contemplated herein, 
including, without limitation, using its best efforts to obtain all licenses,
permits, consents, approvals, authorizations, qualifications and orders of 
any Governmental Authority and parties to Contracts with Lux as are
necessary for the consummation of the transactions contemplated hereby.  Each 
of parties shall make on a prompt and timely basis all governmental or 
regulatory notifications and filings required to be made by it for the 
consummation of the transactions contemplated hereby.  The parties also agree 
to use best efforts to defend all lawsuits or other legal proceedings 
challenging this Agreement or the consummation of the transactions
contemplated hereby and to lift or rescind any injunction or restraining 
order or other order adversely affecting the ability of the parties 
to consummate the transactions contemplated hereby. 

5. 5 Access to Information.  From the date hereof to the Effective Time, Lux
shall (and shall cause its directors, officers, employees, auditors, counsel 
and agents to) afford Claire's and Claire's officers, employees, auditors, 
counsel and agents reasonable access during business hours to all assets, 
properties, books, records, accounts, contracts and documents of or relating 
to Lux and such other information as Claire's may reasonably request 
concerning the businesses, finances and properties of Lux and its operations.  
No information provided to or obtained by Claire's after the date of this 
Agreement shall affect any representation or warranty in this Agreement.

5. 6 Notification of Certain Matters.  Lux, the Shihs and the Stockholder
shall give prompt notice to Claire's of the occurrence or non-occurrence of 
any event which would likely cause, or would have caused, any representation 
or warranty contained herein to be untrue or inaccurate, or any covenant, 
condition, or agreement contained herein not to be complied with or satisfied. 

5. 7 Tax and Accounting Treatment.  Claire's, Lux, the Shihs and the
Stockholder will use their respective best efforts to cause the Merger to 
qualify as a reorganization under the provisions of Section 368(a) of the 
Code and will not knowingly take any action before or after the Effective 
Time to cause the Merger to lose its tax-free status. All parties hereto 
agree to file the Agreement of Merger with its respective federal income tax
returns for the year in which the Merger is effective, if applicable, and to 
comply with the reporting requirements of Treasury Regulation 1.368-3.  In 
addition, Lux, the Shihs and the Stockholder shall not knowingly take any 
action after the date hereof to cause the Merger contemplated hereby not to 
be accounted for as a pooling of interests business combination. 

5. 8 Confidentiality; Publicity.  Except as may be required by law or as
otherwise permitted or expressly contemplated herein, no party hereto or 
their respective Affiliates, employees, agents and representatives shall 
disclose to any third party this Agreement or the subject matter or terms 
hereof, or use or disclose to any third party any information, documents or 
materials disclosed or produced hereunder, without the prior consent of the 
other parties hereto.  No press release or other public announcement related 
to this Agreement or the transactions contemplated hereby shall be issued by 
any party hereto without the prior approval of the other parties, except that 
Claire's may make such public disclosure which it believes in good faith to 
be required by law or rule or regulation or the rules of the NYSE (in which 
case Claire's will consult with an officer of Lux prior to making such 
disclosure). In the event of termination of this Agreement, the parties 
hereto shall promptly return all documents or materials produced hereunder, 
including all copies thereof.

<PAGE>

5. 9 Non-Solicitation.  In the event of termination of
this Agreement, Claire's agrees that, for a period of two years
following the date of such termination, it will not, directly or
indirectly, on behalf of itself or any business in which it may be
involved, initiate contact with any employee of Lux for the
purpose of encouraging such employee to leave his or her
employment, or encourage others to solicit and hire any person
employed by Lux, without the express written consent of Lux.
5. 10     Exclusive Dealings; Failure to Consummate
Without Cause.  

( a) From the date hereof until the Effective Time, or earlier
termination of this Agreement as provided in Section 5.10 or Article XII 
thereof, Lux, the Shihs, the Stockholder and their respective Affiliates, 
employees, agents and representatives will not: (i) initiate, or encourage 
the initiation by others of, discussions or negotiations with third parties 
or respond to solicitations by third persons relating to any merger, sale or 
other disposition of any substantial part of the assets, business or 
properties of Lux (whether by merger, consolidation, sale of stock or 
otherwise); or (ii) enter into any agreement or commitment (whether or not 
binding) with respect to any of the foregoing transactions (collectively, a 
"Transaction").  Lux, the Shihs and the Stockholder will immediately notify
Claire's if any third party attempts to initiate any solicitation, discussion 
or negotiation with respect to any Transaction. 

( b) In the event that Claire's fails to consummate the Merger
otherwise than by reason of failure of the conditions set forth in Article VI 
hereof or Lux's violation of Section 5.10(a) hereof or as otherwise provided 
in Article XII hereof, then Claire's will immediately pay to or at the 
direction of Lux the sum of (x) the amount of all costs and expenses incurred 
by or on behalf of Lux, the Shihs and the Stockholder prior to the date
hereof and such additional costs and expenses incurred after the date hereof 
in connection with the investigation, negotiation and structuring of the 
transaction contemplated hereby (including, without limitation, legal, 
accounting, consulting and financial advisory fees) (collectively, the "Lux 
Expenses"), plus One Million Dollars ($1,000,000).  Notwithstanding
the foregoing, if the Merger contemplated hereby is not consummated due 
solely to the failure of Lux, the Shihs and/or the Stockholder to fulfill on 
a timely basis any condition or obligation imposed on them under this 
Agreement which is required to be fulfilled by Lux, the Shihs and/or the 
Stockholder, Claire's shall not be required to pay either the Lux Expenses or 
the additional amount referred to in this Section 5.10(b).

<PAGE>

5. 11     Claire's Due Diligence Review and
Environmental Assessment.  Claire's shall be entitled to conduct
prior to Closing a due diligence review of the assets, properties,
business, financial condition, books and records of Lux and an
environmental assessment of the Leased Premises (hereinafter
referred to as "Environmental Assessment").  The Environmental
Assessment may include, but not be limited to, a physical
examination of the Leased Premises, and any structures,
facilities, or equipment located thereon, soil samples, ground and
surface water samples, storage tank testing, review of pertinent
records (including, but not limited to, off-site disposal records
and manifests), documents, and Licenses of Lux.  Lux, the
Stockholder and their respective Affiliates shall provide Claire's
or its designated agents or representatives with reasonable access
to such property which Claire's, its agents or representatives
require to conduct the Environmental Assessment, provided such
Environmental Assessment is conducted without material disruption
of Lux's business and operations. If the Environmental Assessment
identifies environmental conditions which requires remediation,
corrective action, or further evaluation under the Environmental
Laws or the modification of operational practices to come into

compliance with Environmental Laws or if the results of the
Environmental Assessment or due diligence review are otherwise not
reasonably satisfactory to Claire's in its sole discretion, then
Claire's may elect not to close the transactions contemplated by
this Agreement in which case this Agreement shall be terminated.
Claire's failure or decision not to conduct any such Environmental
Assessment shall not affect any representation or warranty of Lux
or the Stockholder under this Agreement.
5. 12     Lux's Due Diligence Review.  Lux, the Shihs
and the Stockholder shall be entitled to conduct prior to Closing
a due diligence review of the assets, properties, businesses and
financial condition of Claire's based solely upon the SEC Filings
referred to in Section 2.8 hereof.
5. 13     Trading in Claire's Common Stock.  Except as
otherwise expressly consented to by Claire's, from the date of
this Agreement until the Effective Time, neither Lux, the Shihs
nor the Stockholder (nor any Affiliates thereof) will directly or
indirectly purchase or sell (including short sales) any shares of
Claire's Common Stock (or any put, call, option or derivative
security or the like relating thereto) in any transactions
effected on the NYSE or otherwise. 
[5. 14    Intentionally deleted]

5. 15     Stockholder and Director Vote.  The
Stockholder, in executing this Agreement, consents as a
stockholder of Lux, and each of David and Eva, in executing this
Agreement, consents as a director of Lux, to the Merger and the
transactions contemplated hereby, and waives notice of any meeting
in connection therewith and hereby releases and waives all rights
with respect to the transactions contemplated hereby under any
agreements relating to the sale, purchase or voting of Lux Common
Stock other than this Agreement and the transactions and documents
contemplated hereby.

<PAGE>

5. 16     Additional Financial Statements. The Shihs and
the Stockholder shall cause Arthur Andersen LLP, at Claire's sole
expense, to assist KPMG Peat Marwick, LLP, Claire's independent
certified public accountants ("KPMG"), in connection with the
preparation of any and all additional financial statements that
KPMG deems to be necessary to satisfy Claire's obligations under
the federal securities laws (the "Additional Financial
Statements") including, without limitation, pro-forma financial
statements giving effect to the Merger, all of which financial
statements shall be in conformity with GAAP and Regulation S-X as
promulgated under the Securities Act.

[5. 17    Intentionally deleted]

5. 18     Non-Competition.

( a) General.  In consideration of, and in order to induce Claire's to
enter into this Agreement and to consummate the transactions contemplated 
hereby, each of the Shihs (other than the Trust), hereby covenants and 
agrees that he or she shall not, without the prior written consent of 
Claire's, for a period of three (3) years from and after the
Effective Time:

( i) directly or indirectly, for himself (or
herself) or for any other persons, firm, corporation, partnership,
association or other entity (including the Stockholder), employ or
attempt to employ any employee of Lux or Claire's or its
subsidiaries or Affiliates until at least six months after the
date such employee was not employed by Lux or Claire's or any of
its subsidiaries or Affiliates; or

( ii)     (A)  directly or indirectly acquire
or own in any manner any interest in any person, firm,
partnership, corporation, association or other entity which is
engaged in the retail apparel business (the "Business") or which
competes in the Business in any way with Lux or Claire's, or any
of its subsidiaries or Affiliates, within the States of Alaska,
Arizona, California, Colorado, Idaho, Illinois, Montana, Nevada,
New Mexico, Oregon, Utah and Washington or any other state in
which Lux shall hereafter operate while he or she is employed by
Lux or Claire's or any of its subsidiaries or Affiliates, or (B)
be employed by or serve as an employee, agent, officer, director
of, or as a consultant to, any person, firm, partnership,
corporation, association or other entity which is engaged in the
Business or which competes with Lux or Claire's, or any of its
subsidiaries or Affiliates, within the States of Alaska, Arizona,
California, Colorado, Idaho, Illinois, Montana, Nevada, New
Mexico, Oregon, Utah and Washington or any other state in which
Lux shall hereafter operate while he or she is employed by Lux or
Claire's or any of its subsidiaries or Affiliates.

( b) Ownership Exceptions.  The provisions of Section 5.18(a)(ii)(A)
shall not apply to:

     (i)  publicly traded securities, including mutual funds, not to
exceed 1% of the outstanding shares of any single entity; or

<PAGE>

     (ii) shares held in blind trusts.

( c) Employment Exceptions.  The provisions of Section 5.18(a)(ii)(B)
shall not apply to Daniel Shih in his employment with Bain Capital of Boston, 
MA or any other investment banking firms.

( d) Nondisclosure.  Each of the Shihs hereby agrees that he or she
shall not at any time, disclose, directly or indirectly, to any person, firm, 
corporation, partnership, association or other entity, any confidential 
information relating to Lux or to Claire's, including without limitation, 
sources of leads and methods of obtaining new business or the methods 
generally of doing and operating their respective businesses, except to the
extent that such information is a matter of public knowledge or is required 
to be disclosed by law or by judicial or administrative process.

( e) Notwithstanding any other provision of this Agreement, any
action to enforce the noncompetition or nondisclosure provisions of this 
Section 5.18 shall be governed exclusively by the laws of the State of 
Washington, without regard to any conflicts provisions.  Further, and 
notwithstanding any other provision of this Agreement, jurisdiction
and venue for such action shall lie in the United States District Court for 
the Western District of Washington at Seattle.

5. 19     Lease Amendment.  At the Closing, the Shihs
will cause Shih Family Limited Partnership, as lessor, and Lux, as
Lessee, to execute and deliver the lease amendment in the form of
Exhibit 5.19 attached hereto.

5. 20     Consulting Agreement.  At the Closing, David
and Lux shall execute and deliver an agreement, in form and
substance satisfactory to David and Claire's, whereby Lux shall
retain David as a consultant for a period of one year at a
consulting fee of $100,000.

                          ARTICLE  VI
    CONDITIONS TO THE OBLIGATIONS OF THE CLAIRE'S COMPANIES

The obligations of the Claire's Companies to effect the
Merger and the other transactions contemplated hereunder shall be
subject to the fulfillment at or prior to the Effective Time of
the following conditions, any or all of which may be waived in
whole or in part by the Claire's Companies: 

6. 1 Accuracy of Representations and Warranties and
Compliance with Obligations.  The representations and warranties
of Lux, the Shihs and the Stockholder contained in this Agreement
shall be true and correct at and as of the Effective Time with the
same force and effect as though made at and as of that time
except: (a) for changes specifically permitted by or disclosed
pursuant to this Agreement; and (b) that those representations and
warranties which address matters only as of a particular date
shall remain true and correct as of such date. Lux, the Shihs and
the Stockholder shall have performed and complied with all of
their respective obligations required by this Agreement to be

<PAGE>

performed or complied with at or prior to the Effective Time. Lux,
the Shihs and the Stockholder shall have delivered to the Claire's
Companies a certificate, dated as of the Effective Time, duly
signed (in the case of Lux, by its President), certifying that
such representations and warranties are true and correct and that
all such obligations have been complied with and performed. 

6. 2 No Material Adverse Change or Destruction of
Property.  Between the date hereof and the Effective Time: (a)
there shall have been no Material Adverse Change to Lux in its
business, financial position or results of operations excluding
events which affected the teen apparel industry generally in a
like manner or which affected the economy or stock markets
generally; (b) there shall have been no adverse federal, state or
local legislative or regulatory change affecting in any material
respect the services, products or business of Lux; and (c) none of
the properties and assets of Lux shall have been damaged by fire,
flood, casualty, act of God or the public enemy or other cause
(regardless of insurance coverage for such damage) which damages
may have a Material Adverse Effect thereon, and there shall have
been delivered to the Claire's Companies a certificate to that
effect, dated the Effective Time and signed by or on behalf of Lux
and the Stockholder. 

6. 3 Corporate Certificate.  Lux and the Stockholder
shall have delivered to the Claire's Companies: (a) copies of the
Articles of Incorporation and By-laws of Lux as in effect
immediately prior to the Effective Time; (b) copies of resolutions
adopted by the Board of Directors and Stockholder of Lux
authorizing the transactions contemplated by this Agreement; and
(c) a certificate of good standing or corporate existence of Lux
issued by the Secretary of State of the State of Washington and
each other state in which Lux is qualified to do business as of a
date not more than thirty days prior to the Effective Time,
certified in the case of subsections (a) and (b) of this Section
6.3 as of the Effective Time by the President of Lux as being
true, correct and complete. 

6. 4 Opinion of Counsel.  Claire's shall have received
an opinion dated as of the Effective Time from counsel for Lux and
the Stockholder, in its typical format and subject to customary
qualifications and assumptions, and in form and substance
reasonably acceptable to Claire's, to the effect that: 

( a) Lux is a corporation duly organized and validly existing under
the laws of the State of Washington and is authorized to own or lease its 
properties and to carry on its business as now being conducted, and it is 
duly qualified and licensed to do business as a foreign corporation and is in 
good standing or validly existing in all jurisdictions that require such 
qualification or licensing, except for the lack of qualification or licensing
which, individually or in the aggregate, would not have a Material Adverse 
Effect on Lux.

( b) Lux has obtained all necessary authorizations and consents of its
Board of Directors and the Stockholder to effect the Merger; 

( c) All issued and outstanding shares of capital stock of Lux are
owned by the Stockholder;

<PAGE>

( d) This Agreement is a valid and binding obligation of Lux, the
Shihs and the Stockholder, and enforceable against Lux, the Shihs and the 
Stockholder in accordance with its terms, subject to customary limitations, 
such as bankruptcy, insolvency, reorganization, moratorium or other laws 
affecting the enforcement of creditors' rights generally or general equitable 
principles.

6. 5 Consents.  Lux shall have received and delivered
copies to Claire's of consents to the transactions contemplated
hereby (or, in the absence of consents, waivers of rights to
terminate or modify any material rights or obligations of Lux)
from any Person from whom such consent (or waiver) is required
under any Contract or instrument and no such consent (or waiver)
shall have been revoked. 

6. 6 Pooling Letters. Claire's shall have received from
Arthur Andersen a letter dated the Effective Time, in form and
substance acceptable to Claire's, confirming that, to its
knowledge after due and diligent inquiry, neither Lux nor any of
the Shihs nor the Stockholder, nor any of their respective
Affiliates, has taken or agreed to take any action that would
prevent Claire's from accounting for the Merger as a pooling of
interests business combination in accordance with GAAP and the
criteria of Accounting Principles Board Opinion ("APB") No. 16 and
the regulations of the SEC. Claire's shall have received from
KPMG, a letter dated the Effective Time, confirming that the
Merger can properly be accounted for as a pooling of interests
combination in accordance with GAAP, APB No. 16 and the
regulations of the SEC.

6. 7 Acknowledgment of Pooling Restrictions; Receipt of
SEC Filings; Completion of Due Diligence.  At or prior to the
Closing the Shihs and the Stockholder shall have delivered to
Claire's a letter agreement acknowledging their status as
Affiliates of Lux, their agreement to comply with the "pooling of
interests" restrictions, their receipt of the SEC Filings, and
satisfactory completion of their due diligence review of Claire's
pursuant to Section 5.12 in form and substance satisfactory to the
Claire's Companies. 

6. 8 Lux Common Stock.  At the Closing, the Stockholder
shall have delivered to Claire's all certificates evidencing the
shares of capital stock of Lux owned by it, free and clear of any
Liens or restrictions whatsoever. 

6. 9 Stock Powers.  At the Closing, the Stockholder
shall have delivered to Claire's, for use in connection with the
Held Back Shares, ten stock powers executed in blank, with
signatures guaranteed. 

6. 10     No Adverse Litigation.  There shall not be
pending or threatened any action or proceeding by or before any
court or other governmental body which shall seek to restrain,
prohibit, invalidate or collect damages arising out of the Merger
or any other transaction contemplated hereby, and which, in the
judgment of Claire's, makes it inadvisable to proceed with the
Merger and other transactions contemplated hereby. 

6. 11     Government Approvals.  Claire's shall have
obtained all approvals, authorizations and orders of any
Governmental Authority, including expiration or earlier
termination of any applicable HSR Act waiting period. 

<PAGE>

6. 12     Due Diligence Review.  Claire's shall be
satisfied with the results of its due diligence review and
Environmental Assessment pursuant to Section 5.11.

6. 13     Releases.  Each of the Shihs and the
Stockholder shall deliver to Claire's a release (collectively, the
"Releases") in such form as is reasonably satisfactory to Claire's
releasing all claims of any nature against Lux, if any, and any
claims arising out of the Merger and the transactions contemplated
by this Agreement, provided that such Releases shall not cover any
rights of the Shihs and the Stockholder against Claire's under
this Agreement. 

6. 14     Additional Financial Statements.  The
Additional Financial Statements referred to in Section 5.16 shall
have been substantially completed in form and substance
satisfactory to Claire's and all disputes relating thereto have
been satisfactorily resolved.


                          ARTICLE  VII
    CONDITIONS TO THE OBLIGATIONS OF LUX, THE SHIHS AND THE
                          STOCKHOLDER
                                
The obligations of Lux, the Shihs and the Stockholder
to effect the Merger shall be subject to the fulfillment at or
prior to the Effective Time of the following conditions, any or
all of which may be waived in whole or in part by Lux, the Shihs
and the Stockholder: 

7. 1 Accuracy of Representations and Warranties and
Compliance with Obligations.  The representations and warranties
of each of the Claire's Companies contained in this Agreement
shall be true and correct at and as of the Effective Time with the
same force and effect as though made at and as of that time
except: (a) for changes specifically permitted by or disclosed
pursuant to this Agreement; and (b) that those representations and
warranties which address matters only as of a particular date
shall remain true and correct as of such date. Each of the
Claire's Companies shall have performed and complied with all of
its obligations required by this Agreement to be performed or
complied with at or prior to the Effective Time. Each of the
Claire's Companies shall have delivered to Lux, the Shihs and the
Stockholder a certificate, dated as of the Effective Time, and
signed by an executive officer, certifying that such
representations and warranties are true and correct and that all
such obligations have been complied with and performed. 

7. 2 Claire's Shares.  At the Closing, Claire's shall
have issued all of the Claire's Shares and shall have delivered to
the Stockholder: (a) certificates representing the Claire's Shares
issued hereunder, other than the Held Back Shares; and (b) copies
of stock certificates representing the Held Back Shares.

<PAGE>

7. 3 No Adverse Litigation.  There shall not be pending
or threatened any action or proceeding by or before any court or
other governmental body which shall seek to restrain, prohibit,
invalidate or collect damages arising out of the Merger or any
other transaction contemplated hereby, and which in the judgment
of Lux, the Shihs and the Stockholder makes it inadvisable to
proceed with the Merger and other transactions contemplated
hereby. 

7. 4 HSR Act Waiting Period.  Lux, the Shihs and the
Stockholder shall have obtained all authorizations and orders of
any Governmental Authority, including expiration or earlier
termination of any applicable HSR Act waiting period. 

7. 5 Opinion of Counsel.  Lux, the Shihs and the
Stockholder shall have received an opinion dated the Effective
Time from counsel to Claire's, in its typical format, and subject
to customary qualifications and assumptions, and in form and
substance reasonably acceptable to Lux, the Shihs and the
Stockholder, to the effect that: 

( a) This Agreement is a valid and binding obligation of Claire's, and
enforceable against Claire's in accordance with its terms, subject to 
customary limitations, such as bankruptcy, insolvency, reorganization, 
moratorium or other laws affecting the enforcement of creditors' rights 
generally or general equitable principles. 

( b) The Claire's Shares have been validly issued, and are fully paid
and non-assessable. 

7. 6 Release of Obligations.  David and Eva shall have
been unconditionally released from their personal guarantees of
Lux's performance of those certain leases of real estate listed
and designated as such on Schedule 3.14(b).

7. 7 No Material Adverse Change.  Since the date of this
Agreement, there shall not have occurred with respect to the
Claire's Companies, taken as a whole, any Material Adverse Change
in their business, financial position, or results of operations
excluding events which affected the women's fashion accessories
industry generally in a like manner or which affected the economy
or stock markets generally.

7. 8 Due Diligence Review.  Lux and the Stockholder
shall be satisfied with the results of their due diligence review
pursuant to Section 5.12.

7. 9 Reorganization Letter.  The Stockholder shall have
received from tax counsel a letter dated the Effective Time,
confirming that the Merger qualifies as a reorganization under the
provisions of Section 368(a) of the Code.

                         ARTICLE  VIII
                      REGISTRATION RIGHTS

The Stockholder shall have the following registration
rights with respect to the Claire's Shares issued to it
hereunder: 

<PAGE>

8. 1 Registration Rights for Claire's Shares; Filing of
Registration Statement. Claire's, at its own expense, will prepare
and file, within ten (10) business days after its publication of
financial results covering thirty (30) days of postmerger combined
operations of Claire's and Lux, a registration statement on such
appropriate form of the Securities and Exchange Commission (the
"Commission") as shall be selected by Claire's to effect the
registration of all the Claire's Shares for resale from time to
time by a Holder (as defined herein) thereof (the "Registration
Statement") and shall undertake to cause such Registration
Statement to become effective and remain effective so as to cause
the Claire's Shares to be registered under the Securities Act, and
registered, qualified or exempted under the state securities laws
of such jurisdictions as any Holder reasonably requests until such
time the Claire's Shares may be resold pursuant to Rule 144, as
promulgated under the Securities Act. For purposes of this
Article, a person is deemed to be a "Holder" of Claire's Shares
whenever such person is the record owner of Claire's Shares.

8. 2 Expenses of Registration.  Claire's shall pay all
expenses in connection with the registration, qualification and/or
exemption of the Claire's Shares, including any SEC and state
securities or "blue-sky" laws registration and filing fees,
printing expenses, fees and disbursements of Claire's' counsel and
accountants, transfer agent's and registrar's fees, fees and
disbursements of experts used by Claire's in connection with such
registration, qualification and/or exemption, and expenses
incidental to any amendment or supplement to the Registration
Statement or prospectuses contained therein. Claire's shall not,
however, be liable for any sales, broker's or underwriting
commissions upon sale by any Holder of any of the Claire's Shares.

8. 3 Furnishing of Documents.  Claire's shall furnish to
the Holders such reasonable number of copies of the Registration
Statement, such prospectuses as are contained in the Registration
Statement and such other documents as the Holders may reasonably
request in order to facilitate the offering of the Claire's
Shares. 

8. 4 Amendments and Supplements.  Claire's shall prepare
and promptly file with the SEC and promptly notify the Holders of
the filing of such amendments or supplements to the Registration
Statement or prospectuses contained therein as may be necessary to
correct any statements or omissions if, at the time when a
prospectus relating to the Claire's Shares is required to be
delivered under the Securities Act, any event shall have occurred
as a result of which any such prospectus or any other prospectus
as then in effect would include an untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. Claire's shall also advise the
Holders promptly after it shall receive notice or obtain knowledge
thereof, of the issuance of any stop order by the SEC suspending
the effectiveness of the Registration Statement or the initiation
or threatening of any proceeding for that purpose and promptly use
its reasonable best efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such stop order should be
issued. If, after a Registration Statement becomes effective,
Claire's advises the Holders that Claire's considers it
appropriate that the Registration Statement (and all other
registration statements of Claire's then effective and
outstanding) be amended, the Holders shall suspend any further
sales of the Claire's Shares until Claire's advises the Holders
that the Registration Statement has been amended, which amendment
shall be made promptly.

<PAGE>

8. 5 Duration.  Claire's shall maintain the
effectiveness of the Registration Statement until such time as
Claire's reasonably determines, based on an opinion of counsel,
that the Holders will be eligible to sell all of the Shares then
owned by the Holders without the need for continued registration
of the shares, in the three month period immediately following the
termination of the effectiveness of the Registration Statement. 
In no event, however, shall Claire's' obligations contained in
Sections 8.1, 8.3 and 8.4 continue beyond the second anniversary
of the Effective Time. 

8. 6 Further Information.  If Claire's Shares owned by a
Holder are included in any registration, such Holder shall furnish
Claire's such information regarding itself as Claire's may
reasonably request and as shall be required in connection with any
registration, qualification or compliance referred to in this
Agreement. 

8. 7 Indemnification. 

(a)  Claire's will indemnify and hold harmless the
Holders and each person, if any, who controls a Holder within the
meaning of the Securities Act, from and against any and all
losses, damages, liabilities, costs and expenses to which the
Holders or any such controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading; provided, however, that, Claire's will not
be liable in any such case to the extent that any such loss,
damage, liability, cost or expense arises out of or is based upon
an untrue statement or alleged untrue statement or omission or
alleged omission so made in reliance upon and strict conformity
with information furnished by or on behalf of any Holder or such
controlling person in writing specifically for use in the
preparation thereof. 

(b)  Each of the Holders, jointly and severally,
will indemnify and hold harmless Claire's and each person, if
any, who controls Claire's within the meaning of the Securities
Act, from and against any and all losses, damages, liabilities,
costs and expenses to which Claire's or any such controlling
person may become subject under the Securities Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses
are caused by any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement, any
prospectus contained therein or any amendment or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in
reliance upon and in strict conformity with written information
furnished by or on behalf of any Holder specifically for use in
the preparation thereof. 

<PAGE>

(c)  Promptly after receipt by an indemnified
party pursuant to the provisions of paragraph (a) or (b) of this
Section of notice of the commencement of any action involving the
subject matter of the foregoing indemnity provisions, such
indemnified party will, if a claim thereof is to be made against
the indemnifying party pursuant to the provisions of said
paragraph (a) or (b), promptly notify the indemnifying party of
the commencement thereof; but the omission to so notify the
indemnifying party will not relieve it from any liability which
it may have hereunder unless the indemnifying party has been
materially prejudiced thereby nor will such failure to so notify
the indemnifying party relieve it from any liability which it may
have to any indemnified party otherwise than hereunder. In case
such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party shall have the right to participate in, and,
to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party;
provided, however, if the defendants in any action include both
the indemnified party and the indemnifying party and there is a
conflict of interest which would prevent counsel for the
indemnifying party from also representing the indemnified party,
the indemnified party or parties shall have the right to select
separate counsel to participate in the defense of such action on
behalf of such indemnified party or parties. After notice from
the indemnifying party to such indemnified party of its election
to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party pursuant to the provisions of
said paragraph (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of
investigation, unless: (i) the indemnified party shall have
employed counsel in accordance with the provisions of the
preceding sentence; (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after
the notice of the commencement of the action; or (iii) the
indemnifying party has authorized the employment of counsel for
the indemnified party at the expense of the indemnifying party.
Notwithstanding anything to the contrary set forth in this
Article VIII, no indemnifying party shall have the right to
settle or compromise any action for which it has assumed the
defense without the express written consent of the indemnified
party.

(d)  In the event any of the Claire's Shares are
sold by any Holder or Holders in an underwritten public offering
consented to by Claire's, Claire's shall provide indemnification
to the underwriters of such offering and any person controlling
any such underwriter on behalf of the Holder or Holders making
the offering; provided, however, that Claire's shall not be
required to consent to any such underwriting or to provide such
indemnification in respect of the matters described in the
proviso to the first sentence of Section 8.7(a). 

8. 8 Publication of Financial Results.  As soon as
practicable following the completion of its first full fiscal
month after the Effective Time, Claire's shall publish, in a
manner that it deems to be consistent with GAAP, APB No. 16 and
the regulations of the SEC applicable to pooling of interests
business combinations, financial results covering at least thirty
(30) days of postmerger combined operations of Claire's and Lux.

<PAGE>

                          ARTICLE  IX
                        INDEMNIFICATION

9. 1 Agreement by the Shihs and the Stockholder to
Indemnify.  The Shihs and the Stockholder jointly and severally
agree to indemnify and hold Claire's harmless from and against the
aggregate of all expenses, losses, costs, deficiencies,
liabilities and damages (including, without limitation, related
counsel and paralegal fees and expenses) incurred or suffered by
Claire's arising out of or resulting from: (a) any breach of a
representation or warranty made by the Shihs, the Stockholder or
Lux in or pursuant to this Agreement; (b) any breach of the
covenants or agreements made by the Shihs, the Stockholder or Lux
in or pursuant to this Agreement; or (c) any inaccuracy in any
certificate delivered by the Shihs, the Stockholder or Lux
pursuant to this Agreement (collectively, "Indemnifiable
Damages"). With respect to the measurement of Indemnifiable
Damages, Claire's shall have the right to be put in the same
after-tax consolidated financial position as it would have been in
had each of such representations and warranties been true and
correct and had such covenants and agreements been performed in
full. Notwithstanding anything to the contrary contained herein
(other than the proviso at the end of this sentence), Claire's
shall not be entitled to any Indemnifiable Damages unless the
aggregate of all Indemnifiable Damages exceeds One Hundred Fifty
Thousand ($150,000) ("Indemnification Threshold"), in which case
Claire's shall be entitled to (i) the full amount of such
Indemnifiable Damages if such Indemnifiable Damages result from a
breach of Section 4.1(c) or the representations as to the carrying
values of assets and liabilities as reflected in the Financial
Statements, or (ii) the amount of such Indemnifiable Damages in
excess of One Hundred Fifty Thousand Dollars ($150,000) if the
Indemnifiable Damages result from anything other than a breach of
Section 4.1(c) or the representations of Section 3.11; provided
however, that the Indemnification Threshold shall not apply with
respect to, and Claire's shall be entitled to the full amount of
any Indemnifiable Damages resulting from any breach of
representations set forth in Section 3.5 hereof or any
representations set forth in any factual certificate delivered to
Claire's relating to the share ownership of Lux. In the case of
any claim for Indemnifiable Damages, Claire's agrees that it shall
satisfy such claim (other than a claim based on fraud) only out of
the following, and in the following order:  (i) first, out of any
Proceeds (as defined herein) received by the Shihs and the
Stockholder on account of the sale of any of the Held Back Shares
(or any shares of Claire's Common Stock attributable to the Held
Back Shares issued in connection with any stock split or stock
dividend effected by Claire's after the Effective Time); (ii)
second, out of any Held Back Shares (or any Cash Collateral, as
defined in Section 9.5 below) still held by Claire's, and (iii)
third, out of any other shares of Claire's Common Stock
attributable to the Held Back Shares issued in connection with any
stock split or stock dividend effected by Claire's after the
Effective Time.  After such amounts have been exhausted, the Shihs
and the Stockholder shall have no further liability for
Indemnifiable Damages (other than liability based on fraud). As
used in this Article IX, "Proceeds" shall mean in the case of the
sale of any of the Held Back Shares on the NYSE as provided in
Section 9.4(c) hereof, the net proceeds received on account of

<PAGE>

such sale, after deducting any commissions or other selling
expenses paid in connection with such sale  The obligation of the
Shihs and the Stockholder to pay Claire's all Indemnifiable
Damages shall not be eliminated, diminished or impaired by the
existence of any insurance policies or other right to recover some
or all of the Indemnifiable Damages from third parties. Claire's
agrees to use its reasonable efforts to seek recovery under any
applicable insurance policies and from third parties. However,
Claire's' failure to seek recourse, including initiating a lawsuit
against any third party for some or all Indemnifiable Damages,
shall not relieve the Shihs or the Stockholder of their obligation
to pay Claire's any Indemnifiable Damages.  The proceeds actually
received by Claire's, if any, net of all of Claire's unrecovered
costs and expenses (including attorneys' fees and expenses)
incurred in pursuing coverage under such insurance policies, shall
be paid by Claire's to the Stockholder but only to the extent that
the Shihs and/or the Stockholder have actually paid to Claire's
the Indemnifiable Damages relating to the matter for which such
insurance or third party proceeds were paid to Claire's. 

<PAGE>

9. 2 Survival of Representations and Warranties.  Each
of the representations and warranties made by the Shihs and the
Stockholder in this Agreement or pursuant hereto shall survive for
a period ending upon the issuance of the first independent audit
report on Claire's financial statements following the Effective
Time.  No claim for the recovery of Indemnifiable Damages may be
asserted by Claire's against the Shihs or the Stockholder after
such representations and warranties shall thus expire; provided,
however, that claims for Indemnifiable Damages first asserted
within the applicable period shall not thereafter be barred.  Each
representation, warranty, covenant and agreement of the parties
contained in this Agreement is independent of each other
representation, warranty, covenant and agreement. Each of the
representations and warranties of Merger Sub and of Lux shall
expire at the Effective Time. Each of the representations and
warranties of Claire's shall survive for a period ending upon
issuance of the first independent audit report on Claire's
financial statements following the Effective Time. 

9. 3 Procedures for Defense of Third Party Actions. 
Promptly after receipt by Claire's of notice of commencement of
any action by a third party (including service of a summons in
connection with the bringing of a lawsuit) which could give rise
to Indemnifiable Damages in excess of the Indemnification
Threshold (individually or in the aggregate with other claims for
Indemnifiable Damages) set forth in Section 9.1, or to
Indemnifiable Damages for which no Indemnification Threshold
applies, Claire's shall notify the Stockholder of the commencement
thereof to the extent that the Stockholder is otherwise not in
receipt of such notice of commencement themselves.  The omission
to so notify the Stockholder will not relieve it or the Shihs from
any liability which they may have hereunder unless they have been
materially prejudiced thereby, nor will such failure to so notify
the Stockholder relieve them from any other liability which they
may have to Claire's otherwise than hereunder unless they have
been materially prejudiced thereby.  With respect to any such
action commenced by a third party, the Shihs and the Stockholder
shall have the right to participate in, and, to the extent that
they may wish, jointly or individually, to assume the defense
thereof with counsel satisfactory to Claire's; provided, however,
if the defendants in any action include both Claire's (or any of
its Affiliates, including -- after Closing -- Lux) and any or all
of the Shihs or the Stockholder and there is a conflict of
interest which would prevent counsel for the Shihs or the

<PAGE>

Stockholder from also representing Claire's (or its Affiliates),
then Claire's shall have the right to select separate counsel to
participate in the defense of such action on behalf of Claire's
(or its Affiliates).  After notice from the Shihs and the
Stockholder to Claire's of their election to so assume the defense
thereof, they will not be liable to Claire's pursuant to the
provisions of Section 9.1 for the related counsel and paralegal
fees and expenses subsequently incurred by Claire's (or its
Affiliates) in connection with the defense thereof other than
reasonable costs of investigation, unless (i) Claire's (or its
Affiliates) shall have employed counsel in accordance with the
provisions of the preceding sentence; (ii) the Stockholder shall
not have employed counsel satisfactory to Claire's to represent
Claire's (or its Affiliates) within a reasonable time after notice
of the commencement of the action, or (iii) the Stockholder have
authorized the employment of counsel for Claire's (or its
Affiliates) at the expense of the Shihs and the Stockholder. 
Notwithstanding anything to the contrary in this Section 9.3, the
Shihs and the Stockholder shall have no right to settle or
compromise any action for which they have assumed the defense of
to the extent the settlement or compromise involves any injunctive
or other equitable relief or otherwise involves any continuing
obligations of any nature against Claire's or loss of rights of
Claire's (or any of its Affiliates), and nothing stated in this
Section 9.3 shall otherwise affect the Shihs' or the Stockholder's
obligation to pay Claire's all Indemnifiable Damages (other than
such related counsel and paralegal fees and expenses) pursuant to
Section 9.1. 

9. 4 Security for the Indemnification Obligation.  As
security for the agreement by the Shihs and the Stockholder to
indemnify and hold Claire's harmless as described in this Article
IX, at the Closing the Shihs and the Stockholder do hereby grant a
security interest in, pledge and instruct Claire's to set aside
and hold certificates representing the Held Back Shares issued
pursuant to this Agreement. Claire's may set off against the Held
Back Shares (or against any Cash Collateral (defined below)) any
Indemnifiable Damages for which the Shihs and/or the Stockholder
may be responsible pursuant to this Agreement, subject, however,
to the following terms and conditions: 

(a)  Claire's shall give written notice to the
Stockholder of any claim for Indemnifiable Damages or any other
damages hereunder, which notice shall set forth: (i) the amount
of Indemnifiable Damages or other loss, damage, cost or expense
which Claire's claims to have sustained by reason thereof; and
(ii) the basis of such claim; 

(b)  Such setoff shall be effected on the later to
occur of the expiration of 30 days from the date of such notice
or, if such claim is contested, the date the dispute is resolved,
and such set off shall be charged proportionally against the
shares set aside; 

(c)  After the Held Back Shares are registered and
any restrictions on sale imposed under the Securities Act or
otherwise are terminated, the Stockholder may, but not more than
once per calendar quarter, instruct Claire's in writing to sell
some or all of the Held Back Shares and Claire's shall then
utilize reasonable efforts to promptly sell such Held Back Shares
at prevailing market prices on the NYSE, and the Proceeds thereof
shall be substituted for such Held Back Shares in any set off to
be made by Claire's pursuant to any claim hereunder, subject to
continued compliance with any applicable SEC requirements dealing
with pooling of interests and other applicable regulations (any

<PAGE>

Proceeds shall be deposited with a financial institution in such
manner as Claire's shall reasonably determine necessary to retain
its rights to the Proceeds as security for any Indemnifiable
Damages; provided that any Proceeds shall be deposited in an
interest bearing account or invested in United States Government
or Agency obligations reasonably acceptable to the Stockholder);
and 

(d)  For purposes of this Article IX, each share
of Claire's Common Stock not sold as provided in clause (c) of
this Section shall be valued at a price equal to the closing
sales price of a share of Claire's Common Stock as reported on
the NYSE on the Closing Date. 

9. 5 Voting of and Dividends on the Held Back Shares. 
Except with respect to shares transferred pursuant to the
foregoing right of setoff (and in the case of such shares, until
the same are transferred), all Held Back Shares shall be deemed to
be owned by the Stockholder and the Stockholder shall be entitled
to vote the same; provided, however, that, there shall also be
deposited with Claire's subject to the terms of this Article IX,
all shares of Claire's Common Stock issued to the Stockholder as a
result of any stock dividend or stock split and all cash issuable
to the Stockholder as a result of any cash dividend, with respect
to the Held Back Shares (any such cash shall be deemed "Cash
Collateral" hereunder).  All stock and cash issued or paid upon
Held Back Shares shall be distributed to the Stockholder, together
with such Held Back Shares, as provided in Section 9.6.

9. 6 Delivery of Held Back Shares and Cash Collateral. 
Claire's agrees to deliver to the Stockholder no later than the
issuance of the first independent audit report on Claire's
financial statements following the Effective Time any Held Back
Shares, Proceeds and Cash Collateral then held by it unless there
then remains unresolved any claim for Indemnifiable Damages or
other damages hereunder as to which notice has been given, in
which event any Held Back Shares, Proceeds and Cash Collateral
remaining on deposit after such claim shall have been satisfied
shall be delivered to the Stockholder promptly after the time of
satisfaction. 

9. 7 Adjustment to Merger Consideration.  All payments
for Indemnifiable Damages made pursuant to this Article shall be
treated as adjustments to the Merger Consideration. 

9. 8 Indemnity for Environmental Claims.

(a)  In addition to the indemnities provided above in
this  Article IX, the Shihs and the Stockholder jointly and
severally agree to indemnify and hold Lux and Claire's harmless
from and against the aggregate of all expenses, losses, costs,
deficiencies, liabilities and damages (including, without
limitation, related counsel and paralegal fees and expenses)
incurred or suffered by Lux or Claire's arising out of or
resulting from any Environmental Claims (as defined below) for the
environmental matters described in the Environmental Report (as
defined below) for the Property (as defined below); provided,
however, that the aggregate liability of the Shihs and the
Stockholder pursuant to this Article IX shall not exceed an amount

<PAGE>

equal in value to 25% of the Merger Consideration.  All
indemnification payments made with respect to such Environmental
Claims shall be treated as adjustments to the Merger
Consideration.  The indemnification obligations of the Shihs and
the Stockholder with respect to the Environmental Claims referred
to in the Environmental Report shall survive until the expiration
of the applicable statue of limitations.

(b)  For purposes of  this Section 9.8, the following
terms shall have the meanings indicated:

     "Environmental Claims" means any enforcement, cleanup,
removal, remedial or other Governmental Authority actions
threatened, instituted or completed against or with respect to the
Property from time to time pursuant to any applicable
Environmental Laws, and any material claims threatened or made by
any non-governmental party against or with respect to the Property
relating to damage, contribution, cost recovery, compensation,
loss or injury resulting from any Hazardous Substance or any
violation of any applicable Environmental Laws.

     "Environmental Report" means the Phase I Environmental
Assessment Report dated January 30, 1992 and as supplemented on
January 31, 1992 for the Property prepared by Earth Consultants
Inc.

     "Property" means the parcel of the Owned Properties
comprising approximately 1.8 acres located at 1409-1431 Maple
Avenue Southwest in Renton, Washington.

9. 9 Remedies Exclusive; Waiver.  The rights of the
parties hereto as set forth in this Agreement shall constitute
their sole remedy under this Agreement, except for all equitable
rights and remedies to seek specific performance, or to enjoin
violation, of covenants for which monetary damages may be an
inadequate remedy, and for remedies which any of the parties may
have as a result of a claim for fraud and except for all rights
and remedies provided by federal and state securities laws and
regulations.  The Shihs and the Stockholder hereby waive any
rights to contribution or any other similar rights they may have
against Lux as a result of their agreement to indemnify in this
Article IX. 

                           ARTICLE  X
                     SECURITIES LAW MATTERS
The parties agree as follows with respect to the sale
or other disposition after the Effective Time of the Claire's
Shares: 

10. 1     Disposition of Shares.  The Shihs and the
Stockholder represent and warrant that the shares of Claire's
Common Stock being acquired by them hereunder are being acquired
and will be acquired for their own respective accounts and will
not be sold or otherwise disposed of, except pursuant to: (a) an
exemption from the registration requirements under the Securities
Act, which does not require the filing by Claire's with the SEC of
any registration statement, offering circular or other document,
in which case, the Shihs and the Stockholder shall first supply to
Claire's an opinion of counsel (which counsel and opinion shall be

<PAGE>

satisfactory to Claire's) that such exemption is available; or (b)
an effective registration statement filed by Claire's with the SEC
under the Securities Act. 

10. 2     Legend.  The certificates representing the
Claire's Shares shall bear the following legend until such time a
registration statement is in effect covering such shares:

            THE SHARES REPRESENTED BY THIS
            CERTIFICATE HAVE NOT BEEN REGISTERED
            UNDER THE SECURITIES ACT OF 1933, AS
            AMENDED (THE "ACT") AND MAY NOT BE SOLD,
            TRANSFERRED OR OTHERWISE DISPOSED OF BY
            THE HOLDER EXCEPT PURSUANT TO AN
            EFFECTIVE REGISTRATION STATEMENT FILED
            UNDER THE ACT, AND IN COMPLIANCE WITH
            APPLICABLE SECURITIES LAWS OF ANY STATE
            WITH RESPECT THERETO, OR IN ACCORDANCE
            WITH AN OPINION OF COUNSEL IN FORM AND
            SUBSTANCE SATISFACTORY TO THE ISSUER
            THAT AN EXEMPTION FROM SUCH REGISTRATION
            IS AVAILABLE, AND ALSO MAY NOT BE SOLD,
            TRANSFERRED OR OTHERWISE DISPOSED OF BY
            THE HOLDER WITHOUT COMPLIANCE WITH THE
            SECURITIES AND EXCHANGE COMMISSION'S
            ACCOUNTING SERIES RELEASES 130 AND 135.

Claire's may, unless a registration statement is in effect
covering such shares, place stop transfer orders with its
transfer agent with respect to such certificates in accordance
with federal securities laws. 

                          ARTICLE  XI
                          DEFINITIONS

11. 1       Defined Terms.  As used herein, the following
terms shall have the following meanings:

          "Affiliate" shall have the meaning ascribed to it in
          Rule 12b-2 of the General Rules and Regulations under
          the Exchange Act, as in effect on the date hereof. 
          "Contract" means any agreement, contract, lease, note,
          mortgage, indenture, loan agreement, franchise
          agreement, covenant, employment agreement, license,
          instrument, purchase and sales order, commitment,
          undertaking, obligation, whether written or oral,
          express or implied. 

          "Exchange Act" means the Securities Exchange Act of
          1934, as amended. 

<PAGE>

          "GAAP" means generally accepted accounting principles
          in effect in the United States of America from time to
          time. 

          "Governmental Authority" means any nation or
          government, any state, regional, local or other
          political subdivision thereof, and any entity or
          official exercising executive, legislative, judicial,
          regulatory or administrative functions of or pertaining
          to government. 

          "HSR Act" means the Hart-Scott-Rodino Antitrust
          Improvements Act of 1976, as amended. 

          "Lien" means any mortgage, pledge, security interest,
          encumbrance, lien or charge of any kind (including, but
          not limited to, any conditional sale or other title
          retention agreement, any lease in the nature thereof,
          and the filing of or agreement to give any financing
          statement under the Uniform Commercial Code or
          comparable law or any jurisdiction in connection with
          such mortgage, pledge, security interest, encumbrance,
          lien or charge). 

          "Material Adverse Change (or Effect)" means a change in
          (or effect on) the condition (financial or otherwise),
          properties, assets, liabilities, rights, obligations,
          operations, business or prospects which change (or
          effect) individually or in the aggregate, is materially
          adverse to such condition, properties, assets,
          liabilities, rights, obligations, operations, business
          or prospects.

          "NYSE" means the New York Stock Exchange. 

          "Person" means an individual, partnership, corporation,
          business trust, joint stock company, estate, trust,
          unincorporated association, joint venture, Governmental
          Authority or other entity, of whatever nature. 

           "SEC" means the Securities and Exchange Commission. 

          "Securities Act" means the Securities Act of 1933, as
          amended. 

          "Tax Return" means any tax return, filing, estimated
          payment or information statement required to be filed
          in connection with or with respect to any Taxes; and 

          "Taxes" means all taxes, fees or other assessments,
          including, but not limited to, income, excise,
          property, sales, franchise, intangible, withholding,
          social security and unemployment taxes imposed by any
          federal, state, local or foreign governmental agency,
          and any interest or penalties related thereto. 

<PAGE>

11. 2     Other Definitional Provisions.

(a)  All terms defined in this Agreement shall
have the defined meanings when used in any certificates, reports
or other documents made or delivered pursuant hereto or thereto,
unless the context otherwise requires. 

(b)  Terms defined in the singular shall have a
comparable meaning when used in the plural, and vice versa. 

(c)  Unless otherwise expressly indicated herein,
all matters of an accounting nature in connection with this
Agreement and the transactions contemplated hereby shall be
determined in accordance with GAAP applied on a basis consistent
with prior periods, where applicable. 

(d)  As used herein, the neuter gender shall also
denote the masculine and feminine, and the masculine gender shall
also denote the neuter and feminine, where the context so
permits. 

                         ARTICLE  XII 
                          TERMINATION 

12.1      Termination.  This Agreement may be terminated at
any time prior to the Effective Time:

(a)       by mutual written consent of all of the
parties hereto at any time prior to the Closing; or

(b)       by Claire's upon delivery of written notice
to the Stockholder in accordance with Section 13.1 of this
Agreement in the event of a material breach by Lux or any of the
Shihs or the Stockholder of any provision of this Agreement; or 

(c)       by the Stockholder upon delivery of written
notice to Claire's in accordance with Section 13.1 of this
Agreement in the event of a material breach by Claire's of any
provision of this Agreement;  or

(d)       by either Claire's or the Stockholder if the
Closing shall not have occurred by September 30, 1998.

12.2      Effect of Termination.  In the event of
termination of this Agreement pursuant to Section 12.1, this
Agreement shall forthwith become void and of no further force and
effect and the parties shall be released from any and all
obligations hereunder; provided, however, that the provisions of
Section 5.8 shall survive termination and continue in full force
and effect and that nothing herein shall relieve any party from
liability for damages resulting from the willful breach of any of
its representations, warranties, covenants or agreements set
forth in this Agreement. 

<PAGE>

                         ARTICLE  XIII
                       GENERAL PROVISIONS

13. 1     Notices.  All notices, requests, demands,
claims, and other communications hereunder shall be in writing and
shall be delivered by certified or registered mail (first class
postage pre-paid), guaranteed overnight delivery, or facsimile
transmission if such transmission is confirmed by delivery by
certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and
telecopy numbers (or to such other addresses or telecopy numbers
which such party shall designate in writing to the other party): 

(a)       if to any of the Claire's Companies to:
                    Claire's Stores, Inc.
                    3 S.W. 129th Avenue
                    Pembroke Pines, Florida 33027
                    Attn:  Rowland Schaefer, President
                    Telecopy:  (305) 433-3999
                    
                    with a copy to:
                    
                    Greenberg Traurig Hoffman Lipoff Rosen &
                    Quentel, P.A.
                    1221 Brickell Avenue
                    Miami, Florida 33131
                    Attn:  Harold E. Berritt, Esq.
                    Telecopy:  (305) 579-0717
                    
(b)            if to Lux and/or any of the Shihs or the
Stockholder to:
                    Crestwood Partners LLC
                    P.O. Box 800
                    Mercer Island, Washington 98040
                    Attn:  David Shih, Manager
                    Telecopy:  (206) 232-4222
                    
                    with a copy to:
                    
                    Ellis, Li & McKinstry PLLC
                    999 Third Avenue, Suite 3700
                    Seattle, Washington 98104
                    Attn:  Chi-Dooh Li, Esq.
                    Telecopy:  (206) 625-1052
                    
Notice shall be deemed given on the date sent if sent by
overnight delivery or facsimile transmission and on the date
delivered (or the date of refusal of delivery) if sent by
certified or registered mail. 

<PAGE>

13. 2     Entire Agreement.  This Agreement (including
the Exhibits and Schedules attached hereto) and other documents
delivered at the Closing pursuant hereto, contains the entire
understanding of the parties in respect of its subject matter and
supersede all prior agreements and understandings (oral or
written), and any drafts thereof, between or among the parties
with respect to such subject matter. The Exhibits and Schedules
constitute a part hereof as though set forth in full above. 

13. 3     Expenses.  Except as otherwise provided
herein, the parties shall pay their own fees and expenses,
including their own counsel fees, incurred in connection with this
Agreement or any transaction contemplated hereby.  

13. 4     Amendment; Waiver. This Agreement (including
the Schedules and Exhibits attached hereto) may not be modified,
amended, supplemented, canceled or discharged, except by written
instrument executed by all parties. No failure to exercise, and no
delay in exercising, any right, power or privilege under this
Agreement shall operate as a waiver, nor shall any single or
partial exercise of any right, power or privilege hereunder
preclude the exercise of any other right, power or privilege. No
waiver of any breach of any provision shall be deemed to be a
waiver of any preceding or succeeding breach of the same or any
other provision, nor shall any waiver be implied from any course
of dealing between the parties. No extension of time for
performance of any obligations or other acts hereunder or under
any other agreement shall be deemed to be an extension of the time
for performance of any other obligations or any other acts. The
rights and remedies of the parties under this Agreement are in
addition to all other rights and remedies, at law or equity, that
they may have against each other. 

13. 5     Binding Effect; Assignment.  The rights and
obligations of this Agreement shall bind and inure to the benefit
of the parties and their respective successors and assigns.
Nothing expressed or implied herein shall be construed to give
any other person any legal or equitable rights hereunder. Except
as expressly provided herein, the rights and obligations of this
Agreement may not be assigned by Lux or any of the Shihs or the
Stockholder without the prior written consent of Claire's.
Claire's may assign all or any portion of its rights hereunder to
any Affiliate thereof, provided that such assignment shall not in
any way affect the Stockholder's rights to the conversion of the
Lux Common Stock into the Claire's Shares.

13. 6     Counterparts.  This Agreement may be executed
in any number of counterparts, each of which shall be an original
but all of which together shall constitute one and the same
instrument. 

13. 7     Interpretation.  When a reference is made in
this Agreement to an article, section, paragraph, clause,
schedule or exhibit, such reference shall be deemed to be to this
Agreement unless otherwise indicated. The headings contained
herein and on the schedules are for reference and convenience
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement or the schedules. Whenever the
words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words
"without limitation." Time shall be of the essence in this
Agreement. 

<PAGE>

13. 8     Governing Law; Interpretation.  Except with
respect to Section 5.18, this Agreement shall be construed in
accordance with and governed for all purposes by the laws of the
State of Florida applicable to contracts executed and to be
wholly performed within such State. 

13. 9     Arm's Length Negotiations.  Each party herein
expressly represents and warrants to all other parties hereto
that: (a) before executing this Agreement, said party has fully
informed itself of the terms, contents, conditions and effects of
this Agreement; (b) said party has relied solely and completely
upon its own judgment in executing this Agreement; (c) said party
has had the opportunity to seek and has obtained the advice of
counsel before executing this Agreement; (d) said party has acted
voluntarily and of its own free will in executing this Agreement;
(e) said party is not acting under duress, whether economic or
physical, in executing this Agreement; and (f) this Agreement is
the result of arm's length negotiations conducted by and among
the parties and their respective counsel. 

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and
year first above written. 
                                   
                                   CLAIRE'S STORES, INC.
                                   By:                      
                                        
                                        Name:  Rowland Schaefer
                                             Title:  President and
                                             Chief Executive
                                             Officer
                                   
                                   
                                   CSI ACQUISITION CORP.
                                   By:                      
                                        
                                        Name:  Rowland Schaefer
                                             Title:  President and
                                             Chief Executive
                                             Officer
                                   
<PAGE>
                                   
                                   LUX CORPORATION
                                   By:                      
                                        
                                        Name:  David Shih
                                             Title:  President 
                                   
                                   
                                   
                                   
                                   CRESTWOOD PARTNERS LLC
                                   
                                   By:                      
                                        
                                   Name:  
                                   Title:
                                   
                                   
                                   
                                   David Shih
                                   
                                   Eva Shih
                                   
                                   Daniel Shih
                                   
                                   Douglas Shih
                                   
<PAGE>
      
                             
                                   SHIH IRREVOCABLE TRUST
                                   By:                      
                                        
                                             Co-Trustee: Daniel Shih 
                                   By:                      
                                        
                                             Co-Trustee: Douglas Shih




March ___, 1998

Lux Corporation
David Shih
Eva Shih
Daniel Shih
Douglas Shih
The Shih Irrevocable Trust
Crestwood Partners LLC
P.O. Box 800
Mercer Island, Washington 98040

Attn: David Shih

Dear Mr. Shih:
This letter (this "Letter") amends and supplements the
Agreement and Plan of Merger (the "Agreement") dated as of March
9, 1998, among Claire's Stores, Inc., CSI Acquisition Corp., Lux
Corporation, Crestwood Partners LLC, and David Shih, Eva Shih,
Daniel Shih, Douglas Shih, and the Shih Irrevocable Trust.  Except
as expressly set forth herein, all provisions of the Agreement,
including the Schedules and Exhibits thereto, shall remain in full
force and effect.  This Letter shall be governed by and construed
in accordance with the laws of the State of Florida without giving
effect to conflict or choice of law provisions thereof.  Unless
defined herein, all capitalized terms used herein shall have the
meanings ascribed to such terms in the Agreement.

<PAGE>

 1.  Schedules 3.1, 3.6, 3.8, 3.10, 3.12, 3.13, 3.14(b),
3.15, 3.17, 3.18, 3.19, 3.25 and 3.29 to the Agreement are each
hereby deleted and superseded by the Schedules attached hereto.

 2.  All references in the Agreement to the term "Exchange
Ratio" are hereby amended and deemed to mean 1,035.1430 shares of
Claire's Common Stock.

 3.  All references in the Agreement to the term "Merger
Consideration" are hereby amended and deemed to mean 2,070,286
shares of Claire's Common Stock.

 4.  All references in the Agreement to the term "Held Back
Shares" are hereby amended and deemed to mean 207,000 shares of
Claire's Common Stock.

 5.  Notwithstanding anything to the contrary set forth in
the Agreement, including, without limitation, Sections 3.11 and
4.1 thereof:

     ( a) At the Effective Time, Lux may be liable for
     indebtedness for borrowed money not to exceed: (i)
     $1,600,000, which amount is currently outstanding under its
     existing line of credit with Seafirst Bank; and (ii) such
     additional amount, the incurrence of which is necessary in
     order to make the distributions to the Shihs referred to in
     paragraph 3 of Schedule 3.10, as amended; provided that the
     Shihs hereby, jointly and severally, agree to repay to Lux
     all or any portion of such distributions to the extent that
     such distributions exceed their tax liabilities in connection
     with Lux's short S Corporation year, as finally determined. 
     Conversely, if such finally determined tax liabilities exceed
     the amount of such distributions, Lux will immediately pay
     such excess to the Shihs.  

     ( b) Except as expressly set forth herein, Lux may not
     incur any other indebtedness for borrowed money without the
     express written consent of Claire's;  and 

     (c)  Lux may not pay any bonuses (accrued or otherwise)
     to the Shihs or the Stockholder in 1998.

 6.  Notwithstanding Section 7.6 of the Agreement, if three
(3) business days prior to the Closing Date David and Eva shall
not have been unconditionally released from all of their personal
guarantees of Lux's indebtedness to Seafirst Bank referred to
above and of Lux's performance of those certain leases of real
estate listed and designated as such on Schedule 3.14(b) to the
Agreement, then Claire's shall execute and deliver an agreement,

<PAGE>

in form and substance satisfactory to Claire's and David and Eva,
whereby Claire's will indemnify and hold each of David and Eva
harmless from and against any and all losses, damages,
liabilities, costs and expenses to which each of David and Eva may
become subject under any such personal guarantee then still in
effect.

Please have Lux, the Shihs and the Stockholder sign and
return an original and one copy of this letter to the undersigned
to indicate their acceptance of the terms set forth herein,
whereupon this letter and your acceptance shall constitute a
binding agreement between us as of the date first above written.


   CLAIRE'S STORES, INC.
   
   
   By:
   ____________________________
     Name: Rowland Schaefer
     Title: President and Chief
   Executive        Officer
   
   CSI ACQUISITION CORP.
   
   
   By:
   ____________________________
     Name: Rowland Schaefer
     Title: President and Chief
   Executive        Officer
   
   
Agreed and Accepted:

<PAGE>

LUX CORPORATION

By:_________________
Name:_______________
Title:________________





CRESTWOOD PARNTERS LLC

By:____________________
Name:__________________
Title:___________________

______________________
David Shih

_____________________
Eva Shih

____________________
Daniel Shih

____________________
Douglas Shih

<PAGE>

SHIH IRREVOCABLE TRUST

By:________________________
Co-Trustee: Daniel Shih

By:________________________
Co-Trustee: Douglas Shih


MARCH 24, 1998 ADDENDUM TO LETTER AMENDMENT
 DATED MARCH 23, 1998 ("LETTER AMENDMENT"):

  2. In the event payments are made in the ordinary course of business on the 
line of credit referred to in Paragraph 5(a) of the Letter Amendment, so that 
the indebtedness at the Effective Time is less than $1,600,000, the Exchange 
Ratio, Merger consideration, and Held Back Shares shall al be adjusted 
proportionately to reflect the actual indebtedness at the Effective Time.

  3. The representations and warranties in Section 3.7 are true, except for 
the transfer of stock identified in Schedule 3.4.
 
 4. Schedule 3.25 does not list under Designated Contracts those contracts 
related to current Lux store expansions or remodeling.    However, the 
representations and warranties in Section 3.25 are equally true with respect 
to such contracts.    Copies of such contracts shall be provided to
Claire's upon request.

<PAGE>

  5. Claire's consents to revising Eva Shih's annual salary to $250,000, 
effective December 1, 1997.

  6. The parties shall promptly make their HSR filings referred to in Section 
5.4, which shall be filed not later than five business days after the date of 
the Letter Amendment.

  7. Immediately prior to the Effective Time, CSI Acquisition Corp. shall 
have no negative net worth.

AGREED TO AND ACCEPTED BY:
CLAIRE'S STORES, INC.

By:                      
     Name:     Rowland Schaefer
     Title:    President and Chief Executive
          Officer


CSI ACQUISITION CORP.


By:                      
     Name:     Rowland Schaefer
     Title:    President and Chief Executive
          Officer

LUX CORPORATION


By:                      
     Name:                    
     Title:                   

<PAGE>

CRESTWOOD PARTNERS LLC


By:                      
     Name:                    
     Title:                   


                         
David Shih


                         
Eva Shih


                         
Daniel Shih


                         
Douglas Shih


SHIH IRREVOCABLE TRUST


By:                      
Co-Trustee:    Daniel Shih

By:                      
Co-Trustee:    Douglas Shih

<PAGE>


April ___, 1998
Lux Corporation
David Shih
Eva Shih
Daniel Shih
Douglas Shih
The Shih Irrevocable Trust
Crestwood Partners LLC
P.O. Box 800
Mercer Island, Washington 98040

Attn: David Shih

Dear Mr. Shih:

This letter (this "Letter") amends and supplements the Agreement and Plan of 
Merger dated as of March 9, 1998 (as amended by the Letter Amendment dated 
March 23, 1998 and the Addendum thereto dated March 24, 1998, the 
"Agreement"), among Claire's Stores, Inc., CSI Acquisition Corp., 
Lux Corporation and Crestwood Partners LLC, and David Shih, Eva Shih, Daniel
Shih, Douglas Shih, and the Shih Irrevocable Trust.  Except as expressly set 
forth herein, all provisions of the Agreement, including the Schedules and 
Exhibits thereto, shall remain in full force and effect.  This Letter shall 
be governed by and construed in accordance with the laws of the State
of Florida without giving effect to conflict or choice of law provisions 
thereof.  Unless defined herein, all capitalized terms used herein shall have 
the meanings ascribed to such terms in the Agreement.

In addition to the indemnities provided for in Article IX of the Merger 
Agreement, the Shihs and the Stockholder hereby jointly and severally agree 
(notwithstanding anything to the contrary set forth in the Agreement or in 
any certificate or other document relating to the Agreement and the
transactions contemplated thereby, including the Merger) to indemnify and 
hold Lux and Claire's harmless from and against the aggregate of all 
expenses, losses, costs, deficiencies, liabilities and damages (including, 
without limitation, related counsel and paralegal fees and expenses) incurred or
suffered by Lux or Claire's arising out of or resulting from any Taubman 
Claims (as defined below) with respect to the Taubman Leases (as defined 
below); provided, however, that the aggregate liability of the Shihs and the 
Stockholder pursuant to this Letter and Article IX of the Merger
Agreement shall not exceed an amount equal in value to 25% of the Merger 
Consideration.  All indemnification obligations of the Shihs and the 
Stockholder with respect to the Taubman Claims shall survive until expiration 
of the applicable statute of limitations. 

<PAGE>

For purposes hereof, the following terms shall have the meanings indicated:

"Taubman Claims" means any material claim or action threatened, instituted or 
completed by any landlord of any Taubman Lease against or with respect to any 
of the Taubman Leases relating to default, damage, compensation, loss or 
injury resulting from the actions and/or inactions of Lux, the Shih and/or the 
Stockholder at or prior to the Effective Time, including without limitation,
consummation of the Merger.

"Taubman Leases" means the leases designated as numbers 44, 59, 60, 63, 68, 
70, 71 and 72 on Schedule 3.14(b) of the Agreement.

Please have Lux, the Shihs and the Stockholder sign and return an original 
and one copy of this letter to the undersigned to indicate their acceptance 
of the terms set forth herein, whereupon this letter and your acceptance 
shall constitute a binding agreement between us as of the date first
above written.
     
   CLAIRE'S STORES, INC.
   
   
   By: __________________________________
     Name: Rowland Schaefer
     Title: President and Chief Executive Officer
   
   
<PAGE>
   
   
   CSI ACQUISITION CORP.
   
   
   By: __________________________________
     Name: Rowland Schaefer
     Title: President and Chief Executive         Officer


Agreed and Accepted:

LUX CORPORATION

By:_________________
Name:_______________
Title:________________

<PAGE>

CRESTWOOD PARTNERS LLC

By:____________________
Name:__________________
Title:___________________

______________________
David Shih

_____________________
Eva Shih

____________________
Daniel Shih

____________________
           Douglas Shih


SHIH IRREVOCABLE TRUST

By:________________________
Co-Trustee: Daniel Shih

By:________________________
Co-Trustee: Douglas Shih


<PAGE>