================================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                            ------------------------
                                    FORM 10-K


     [X]  ANNUAL  REPORT  PURSUANT  TO  SECTION  13  OR  15  (D)
          OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934

          FOR  THE  FISCAL  YEAR  ENDED  FEBRUARY  3,  2001
                           OR
     [ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15  (D)
          OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934

          FOR  THE  TRANSITION  PERIOD  FROM ___ TO ___

                 COMMISSION  FILE  NO.   1-8899
                 -------------------------------

                              CLAIRE'S STORES, INC.
             (Exact name of registrant as specified in its charter)


        FLORIDA                                              59-0940416
(State  or  other  jurisdiction  of                      (I.R.S.  employer
incorporation  or  organization)                         identification  No.)

3  S.W. 129TH AVENUE, PEMBROKE PINES, FLORIDA                   33027
(Address of principal executive offices)                      (Zip Code)

     Registrant's  telephone  number,  including  area  code:  (954)  433-3900
     Securities  registered  pursuant  to  Section  12(b)  of  the  Act:

                                                NAME  OF  EACH  EXCHANGE  ON
       TITLE  OF  EACH  CLASS                          WHICH  REGISTERED
   -------------------------------              -----------------------------
   Common  Stock,  $.05  par value              New York Stock Exchange, Inc.

   Securities  registered  pursuant  to  Section  12(g)  of  the  Act:

                              TITLE OF EACH CLASS
                          -----------------------------
                      Class A Common Stock, $.05 par value


   Indicate  by  check  mark  whether  the registrant: (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months  (or  for  such shorter period that the
registrant was required to file such reports),  and (2) has been subject to such
filing  requirements  for  the  past  90  days.  Yes X  No
                                                    ----  ----
   Indicate  by  check  mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form  10-K.  [ ]

   At  March  31,  2001,  the aggregate market value of the 41,918,551 shares of
voting  stock  held  by  non-affiliates  of  the  registrant  was  $741,958,000.

   At  March  31,  2001 there were outstanding 45,932,314 shares of registrant's
Common  Stock,  $.05 par value, and 2,844,403 shares of the registrant's Class A
Common  Stock,  $.05  par  value,  including  Treasury  Shares.

                DOCUMENTS  INCORPORATED  BY  REFERENCE

   The  Proxy Statement for the 2001 Annual Meeting of Stockholders, to be filed
no  later than 120 days after the end of the Registrant's fiscal year covered by
this  report,  is  incorporated  by  reference  into  Part  III.

================================================================================


<PAGE>


                                TABLE OF CONTENTS

                                     PART I


ITEM                                                                 PAGE  NO.
----                                                                 ---------

  1.     Business                                                            3

  2.     Properties                                                          5

  3.     Legal  Proceedings                                                  6

  4.     Submission  of  Matters  to  a  Vote  of  Security  Holders         6


                                    PART II

  5.     Market  for  Registrant's  Common  Equity  and  Related
         Stockholder  Matters                                                7

  6.     Selected  Financial  Data                                           8

  7.     Management's  Discussion  and  Analysis  of  Financial
         Condition  and  Results  of  Operations                             9

  7A.    Quantitative  and  Qualitative  Disclosures  About
         Market  Risks                                                      16

  8.     Financial  Statements  and  Supplementary  Data                    16

  9.     Changes  in  and  Disagreements  with  Accountants  on
         Accounting  and  Financial  Disclosure                             33


                                    PART III

  10.    Directors  and  Executive  Officers  of  the  Registrant           33

  11.    Executive  Compensation                                            33

  12.    Security  Ownership  of  Certain  Beneficial  Owners
         and  Management                                                    33

  13.    Certain  Relationships  and  Related  Transactions                 33


                                    PART IV

  14.    Exhibits,  Financial  Statement  Schedules  and
         Reports  on  Form  8-K                                             34


                                        2
<PAGE>


PART  I

ITEM  1.  BUSINESS

General
-------

Claire's  Stores,  Inc.  (the "Company"), through its wholly-owned subsidiaries,
Claire's  Boutiques,  Inc.  ("Claire's"),  which  also  operates  through  its
Afterthoughts  division  ("Afterthoughts"), Claire's Puerto Rico Corp. ("CPRC"),
Claire's  Canada Corp. ("CCC"), Claire's Accessories UK Ltd. ("CUK"), Bijoux One
Trading AG ("Bijoux"), Cleopatre S.A. ("Cleopatre"), Lux Corporation ("Lux") and
its  50%-owned  joint venture Claire's Nippon Co., Ltd. ("Nippon"), is a leading
mall-based  retailer  of  popular-priced  fashion  accessories  and  apparel for
pre-teens  and teenagers.  As of March 31, 2001, the Company operated a total of
3,021  such  stores  in  50  states,  Canada, the Caribbean, the United Kingdom,
Switzerland,  Austria,  Germany,  France,  Ireland  and  Japan.  The  stores are
operated  mainly  under  the  trade  names  "Claire's  Boutiques"  or  "Claire's
Accessories",  "Afterthoughts",  "The  Icing",  "Bijoux  One"  and  "Cleopatre"
(collectively  the  "Fashion  Accessory  Stores")  and  "Mr.  Rags"(the "Apparel
Stores").

In  February  2000,  the  Company  completed  its  acquisition  of  Cleopatre, a
privately  held 42 store fashion accessory chain with its headquarters in Paris,
France.  The  transaction  was  accounted for as a purchase.  The purchase price
was  approximately $11 million, comprised of approximately $9.5 million cash and
the  assumption  of  debt.  Excess  purchase price over fair market value of the
underlying  assets,  primarily  fixed  assets,  rent deposits and inventory, was
allocated  to  goodwill,  which  will  be  amortized  over  twenty-five  years.

In  December 1999, the Company completed its acquisition of Afterthoughts, a 768
store fashion accessory chain operating as a division of the Venator Group, Inc.
The  transaction  was  accounted for as a purchase.  The purchase price was $250
million,  $200  million of which was financed through a credit facility.  Excess
purchase  price  over  fair  market value of the underlying assets was allocated
primarily  to  goodwill and trademarks, which will be amortized over twenty-five
years.

The  Fashion  Accessory  Stores  specialize  in  selling  popular-priced fashion
accessories  designed  to  predominantly appeal to pre-teen and teenage females.
Merchandise in the Fashion Accessory Stores typically ranges in price between $2
and  $20,  with  the  average product priced at about $4.  The Fashion Accessory
Stores  are similar in format and the different trade names give the Company the
ability  to  have multiple store locations in malls.  Although the Company faces
competition  from  a  number  of small specialty store chains and others selling
fashion  accessories,  the  Company  believes  that its Fashion Accessory Stores
comprise the largest and most successful chain of specialty retail stores in the
world,  devoted  to  the  sale  of  popular-priced pre-teens' and teens' fashion
accessories.

The  Apparel  Stores are operated by Lux under the trade name "Mr. Rags".  These
stores  sell  casual lifestyle, skater/urban fashion apparel and accessories for
the  male  teenage market.  The market for Lux is highly competitive.  There are
numerous  specialty  retail  chains that target male teenagers, many of whom are
much  larger than Lux.  The Company believes Lux can successfully compete due to
its  superior  store  design  and  merchandise  focus.

The  Company's  operations  are divided into three principal product categories.
Jewelry  consists  of  costume  jewelry,  including  earrings  and  ear piercing
services,  while  Accessories  consists  of  other  fashion  accessories,  hair
ornaments,  totebags  and novelty items.  Apparel includes name-brand as well as
private  label  shirts  and  pants.  The  following table compares sales of each
product  category  of  merchandise sold by the Company for the last three fiscal
years:

<TABLE>
<CAPTION>
                                  FISCAL YEAR ENDED
                --------------------------------------------------------
                       FEB. 3,            JAN. 29,           JAN. 30,
                        2001               2000                1999
                ------------------  -----------------  -----------------
                                 (In thousands)
<S>             <C>         <C>     <C>        <C>     <C>        <C>
Jewelry         $  473,989   44.7%  $ 360,812   42.6%  $ 288,053   43.5%
Accessories        475,203   44.8     397,325   46.9     314,135   47.5
Apparel            111,225   10.5      88,761   10.5      59,668    9.0
                ----------  ------  ---------  ------  ---------  ------
                $1,060,417  100.0%  $ 846,898  100.0%  $ 661,856  100.0%
                ==========  ======  =========  ======  =========  ======
</TABLE>


                                        3
<PAGE>


Sales  of  each  category of merchandise vary from period to period depending on
current  fashion trends.  The Company experiences the traditional retail pattern
of  peak  sales during the Christmas, Easter and back-to-school periods.  Sales,
as  a  percentage of total sales in each of the four quarters of the fiscal year
ended  February 3, 2001 ("Fiscal 2001") were 22%, 24%, 23% and 31% in the first,
second,  third  and  fourth  quarters,  respectively.

At  March  31,  2001 the Company had approximately 20,500 employees, 61% of whom
were  part-time.  Part-time  employees  typically  work up to 20 hours per week.
The  Company  has  no collective bargaining agreements with any labor unions and
considers  its  employee  relations  to  be  good.

Fashion  Accessory  Stores
--------------------------

The  Fashion  Accessory Stores are located primarily in enclosed shopping malls.
The  stores  in  North  America  operating  under  the names Claire's Boutiques,
Claire's  Accessories  and Afterthoughts average approximately 1,000 square feet
while  those  stores  operating  under the name "The Icing" average 1,400 square
feet.  The  stores  operating  in  the  United  Kingdom,  Switzerland,  Austria,
Germany,  France,  Ireland  and Japan average 600 square feet and are located in
enclosed  shopping  malls  and  central  business  districts.  Each  store  uses
Company-designed  displays  which  permit  the presentation of a wide variety of
items  in  a  relatively  small  space.

The  stores  are  distinctively  designed  for  customer identification, ease of
shopping  and  quantity  of  selection.  Store  hours  are  dictated by the mall
operators and the stores are typically open from 10:00 A.M. to 9:00 P.M., Monday
through Saturday, and, where permitted by law, from Noon to 5:00 P.M. on Sunday.

Approximately  80%  of  sales  are made in cash, with the balance made by credit
cards.  The  Company  permits,  with  restrictions on certain items, returns for
exchange  or  refund.

The  Company  purchases  its  merchandise from approximately 850 suppliers.  The
Company  is  not  dependent  on  an individual vendor for merchandise purchased.
Substantially  all  of  the  costume  jewelry  and  fashion accessories sold are
purchased  from importers or imported directly.  All merchandise is shipped from
the  suppliers  to  the  Company's  distribution  facility  in  Hoffman Estates,
Illinois,  a  suburb  of Chicago, which services the North American and Japanese
stores  or  the distribution facility in Birmingham, England, which services the
stores in the United Kingdom, Ireland and France, or the distribution facilities
in  Zurich,  Switzerland  or  Vienna, Austria, which service the stores in those
respective  countries.  After  inspection,  merchandise  is  shipped  via common
carrier  to  the  individual  stores.  Stores  typically  receive  three to five
shipments  a  week.

Except as stated below, responsibility for managing the Fashion Accessory Stores
in  North  America  rests  with the Senior Vice President of store operations of
Claire's, who reports to the Chief Executive Officer of the Company. The Company
currently  employs  a  total  of  225  District  Managers, each of whom oversees
approximately  10 stores in his or her respective geographic area and reports to
one  of  19  Regional  Managers.  Each  Regional  Manager  reports  to  one of 6
Territorial  Vice Presidents, who in turn report to the Senior Vice President of
store  operations.  Each store is staffed by a Manager, an Assistant Manager and
one  or more part-time employees.  A majority of the District Managers have been
promoted from within the organization, while a majority of the Regional Managers
were  hired  externally.  All  of  the Territorial Vice Presidents were promoted
from within the organization.  The reporting structure for the Fashion Accessory
Stores  in  the United Kingdom and Europe are similar to the reporting structure
in  North  America.  The  Presidents  of  CUK  and  Bijoux  report  to the Chief
Executive  Officer  of  the  Company.

In  Fiscal 2001, the Company continued to expand its international operations by
opening  a  net 74 Fashion Accessory stores in CUK, bringing the total number of
stores  operating  there  to  356, and by opening a net 14 stores in Bijoux.  In
addition,  the  Company  acquired 42 stores in France through its acquisition of
Cleopatre.  The  Company plans to open (net of closings) approximately 27 stores
in  North  America,  60  stores  in  CUK, 25 stores in Cleopatre and 6 stores in
Bijoux  in  the  fiscal  year  ending  February  2, 2002 ("Fiscal 2002").  Store
expansion  continued  in  Japan  as the Company, with its joint venture partner,
Jusco  Co.,  Ltd.,  a  Japanese  Company, opened a net 19 stores in Fiscal 2001,
bringing  the  total  number of stores operating in Japan to 102.  Current plans
call  for  opening  8  additional  stores  in  Japan  in  Fiscal  2002.


                                        4
<PAGE>


Apparel  Stores
---------------

The  Apparel  Stores are located in enclosed shopping malls.  The Apparel Stores
range in size from approximately 1,600 to 2,500 square feet with an average size
of  2,000  square  feet.

The  representative  price range for merchandise is $10 to $200, with an average
sale  of  approximately  $45.  Cash  and  major  credit  cards  are accepted for
payment.

The  stores  are distinctively designed and well lit, with merchandise displayed
in  a  manner  to  create  visual  excitement.  Marketing  is  aimed at the male
teenager.

The  Apparel  Stores  conduct merchandise purchasing from offices in Long Beach,
California.  Distribution  operations  are  conducted  from  the  Company's
distribution  facility in Hoffman Estates, Illinois.  The merchandise is shipped
via  common  carrier  to  the  stores,  as  required.

The  President  of  Lux  is  responsible  for  managing the Apparel Stores.  The
President  of  Lux  reports  to the Chief Executive Officer of the Company.  The
field  organization  of  Lux  is  similar  in  structure  to  that  of Claire's.
Supervision  of the stores rests with four Regional Sales Managers who supervise
23  District Managers who, in turn, are responsible for overseeing approximately
seven  stores  in  his  or  her  geographic  areas.  Each  store is staffed by a
Manager,  Assistant  Manager  and  part-time  employees,  as  required.

ITEM  2.  PROPERTIES

The  Company's  3,021  stores  operating  as of March 31, 2001 are located in 50
states,  Puerto Rico, Canada, the United Kingdom, Switzerland, Austria, Germany,
France,  Ireland,  the Caribbean and Japan.  The Company leases all of its store
locations,  generally  for  terms  of  seven to ten years (up to 25 years in the
United  Kingdom and Europe).  Under the leases, the Company pays a fixed minimum
rent  and/or  rentals  based on gross sales in excess of specified amounts.  The
Company  also pays certain other expenses (e.g., common area maintenance charges
and  real  estate  taxes) under the leases.  The internal layout and fixtures of
each store are designed by management and constructed under contracts with third
parties.

Most  of the Company's stores are located in enclosed shopping malls, while some
stores  are  located within central business districts and others are located in
"open-air"  outlet  malls  or  "strip  centers".  The  Company  actively  seeks
locations  that  meet  its  criteria and opens new stores when opportunities are
found  within its budget for expansion. Criteria include geographic location and
demographic aspects of communities surrounding the store site, acceptable anchor
tenants,  suitable  location  within  a mall, appropriate space availability and
proposed  rental rates. The Company believes that sufficient desirable locations
are  available  to accommodate its expansion plans.  The Company refurbishes its
existing  stores  on  a  regular  basis.

The  Company has closed 381 stores in the last three fiscal years, primarily due
to  certain  locations  not meeting Company-established profit benchmarks or the
unwillingness  of  the  landlord  to  renew the lease on terms acceptable to the
Company,  as  well  as  the  process  discussed  below.  The  Company  has  not
experienced  any substantial difficulty in renewing desired store leases and has
no  reason  to  expect  any  such difficulty in the future. For each of the last
three  fiscal  years, no individual store accounted for more than one percent of
total  sales.

In  December  1999, as a result of the acquisition of Afterthoughts, the Company
began  a  process  to  eliminate  redundant field operations and optimize square
footage  efficiency.  In  connection  with this plan, the Company has closed 261
stores  and  expects  to  close  or  not  renew  the leases on approximately 120
additional  store  locations.

The  Company  opened  or  acquired  245  stores during Fiscal 2001 and opened 21
stores  in  the  first two months of Fiscal 2002.  The Company plans to continue
opening  stores  when  suitable  locations  are  found  and  satisfactory  lease
negotiations  are  concluded.  The  Company's  initial  investment in new stores
opened  during  the  last  fiscal  year,  including  leasehold  improvements and
fixtures,  but  excluding  inventories,  averaged  approximately  $100,000  and
$236,000  per  store  for  a  Fashion  Accessory  Store  and  an  Apparel Store,
respectively.


                                        5
<PAGE>


The  offices of Claire's and the distribution center for the Company's stores in
North  America  and  Japan  are  located  in  Hoffman  Estates,  Illinois.  This
Company-owned  facility  is  located on 24.8 acres and consists of 520,000 total
square  feet  with 404,000 square feet devoted to receiving and distribution and
116,000  square  feet  for  office  space.

In  January  2000,  CUK  relocated  its  distribution  facility  and  offices to
accommodate  the growth in the business in the United Kingdom and to temporarily
service  the  stores in France. The new lease in the United Kingdom commenced in
December  1999  and terminates in December 2024.  CUK has the right to assign or
sublet  this  lease at any time during the term of the lease.  The new facility,
located  in  Birmingham, England, consists of 25,000 square feet of office space
and  60,000  square feet of distribution space.  CUK intends to assign or sublet
the  old  lease.

The  Bijoux  stores  are serviced by distribution centers and offices in Zurich,
Switzerland and Vienna, Austria.  The facility maintained in Zurich, Switzerland
consists  of  11,600  square  feet devoted to distribution and 5,400 square feet
devoted  to  offices.  The lease for this location expires on December 31, 2001.
Management  intends  to  renew  this  lease  prior  to  expiration.   In Vienna,
Austria, the facility consists of 11,000 square feet devoted to distribution and
3,000  square feet devoted to offices.  The lease on this facility does not have
an  expiration  date but can be terminated by Bijoux with notice to the landlord
at  any  time.

In August 1990, Claire's entered into a lease which expires on July 31, 2001 for
40,000  square  feet of office space in Wood Dale, Illinois.  Under the terms of
the  lease,  Claire's  is  required to pay taxes, utilities, insurance costs and
maintenance  costs.  The  space is not needed by Claire's and has been subleased
to  unrelated  third parties.  The subleases' terms run parallel to the original
lease.

The  Company  leases  from  Rowland  Schaefer & Associates (formerly Two Centrum
Plaza  Associates)  approximately 33,000 square feet in Pembroke Pines, Florida,
where  it  maintains  its  executive,  accounting  and finance offices.  Rowland
Schaefer & Associates is a general partnership of two corporate general partners
which  are  owned  by  immediate family members of the Chairman of the Board and
President  of the Company, two of whom are Co-Vice Chairmen of the Company.  The
lease  provides  for  the  payment  by  the  Company  of  annual  base  rent  of
approximately $574,000, which is subject to annual cost-of-living increases, and
a  proportionate share of all taxes and operating expenses of the building.  The
Company exercised a five year option under the lease.  The expiration date under
the  option  period  is  September  30,  2005.

The  Company  also owns 10,000 square feet of warehouse space in Miami, Florida.
The  property  is being utilized as a storage facility.  The Company also leases
executive  office  space  in  New  York  City  and  is the beneficial owner of a
cooperative  apartment  in  New  York  City.

ITEM  3.  LEGAL  PROCEEDINGS

There  are  no material legal proceedings pending to which the Company or any of
its  subsidiaries  is  a  party  or  to  which any of their property is subject.

ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

There  were no matters submitted to a vote of security holders during the fourth
quarter  of  Fiscal  2001.


                                        6
<PAGE>


                                 PART  II

ITEM  5.  MARKET  FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The  Company  has  two  classes  of  Common  Stock,  par  value  $.05 per share,
outstanding:  Common  Stock  having  one vote per share and Class A Common Stock
having  ten  votes  per share.  The Common Stock is traded on the New York Stock
Exchange, Inc. ("NYSE") under the symbol CLE.  The Class A Common Stock has only
limited  transferability  and  is  not  traded  on  any stock exchange or in any
organized  market.  However,  the  Class  A  Common  Stock  is  convertible on a
share-for-share  basis  into  Common  Stock and may be sold, as Common Stock, in
open  market  transactions.  The  following table sets forth, for each quarterly
period  within the last two fiscal years, the high and low closing prices of the
Common  Stock on the NYSE Composite Tape and the per share dividends declared on
the  Common  Stock  and  the  Class  A  Common  Stock.  At  March  31, 2001, the
approximate  number  of  record  holders  of  shares of Common Stock and Class A
Common  Stock  was  1,707  and  604,  respectively.

<TABLE>
<CAPTION>
                                 CLOSING           DIVIDENDS        DIVIDENDS
                                   OF                  ON           ON CLASS A
                              COMMON STOCK       COMMON STOCK      COMMON STOCK
                             --------------      ------------      ------------
Year Ended February 3, 2001   HIGH    LOW
---------------------------  ------  ------
<S>                          <C>     <C>             <C>              <C>
First Quarter                $22.30  $15.97          $0.04            $0.02
Second Quarter                22.41   16.06           0.04             0.02
Third Quarter                 22.77   16.13           0.04             0.02
Fourth Quarter                24.94   15.63           0.04             0.02

Year Ended January 29, 2000
---------------------------
First Quarter                 30.19  $18.63          $0.04            $0.02
Second Quarter                33.81   25.63           0.04             0.02
Third Quarter                 24.56   16.25           0.04             0.02
Fourth Quarter                24.44   16.88           0.04             0.02
</TABLE>

In  1985,  the  Board of Directors instituted a quarterly dividend on the Common
Stock  of  $.011  per share.  In February 1994, the Board of Directors increased
the  quarterly dividend to $.013 per share and in July 1994 declared a quarterly
dividend  of  $.007 per share on the Class A Common Stock.  In January 1996, the
Board  of  Directors  increased  the quarterly dividend to $.02 per share on the
Common  Stock  and $.01 per share on the Class A Common Stock.  In October 1996,
the Board of Directors increased the quarterly dividend to $.03 per share on the
Common  Stock  and  $.015  per  share on the Class A Common Stock.  The Board of
Directors again increased the quarterly dividend to $.04 per share on the Common
Stock and $.02 per share on the Class A Common Stock in April 1998.  The Company
expects  to  continue  paying  dividends; however, there is no assurance in this
regard  since the declaration and payment of dividends are within the discretion
of  the Board of Directors and are subject to a variety of contingencies such as
the  earnings  and  the  financial  condition  of  the  Company.


                                        7
<PAGE>


ITEM  6.  SELECTED  FINANCIAL  DATA

<TABLE>
<CAPTION>
                                                               FISCAL YEAR ENDED
                                         -------------------------------------------------------------
                                           FEB. 3,    JAN. 29,     JAN. 30,     JAN. 31,     FEB. 1,
                                          2001 (1)      2000     1999 (3)(4)    1998 (3)   1997(1)(3)
                                         -----------  ---------  ------------  ----------  -----------
                                                  (In thousands except per share amounts)
<S>                                      <C>          <C>        <C>           <C>         <C>
Operating Statement Data:
Net Sales                                $1,060,417   $ 846,898  $   661,856   $ 536,754   $  466,300
Income from continuing operations            64,975      87,935       71,652      59,595       45,932
Net Income                                   64,975      87,935       62,280      59,595       45,932

Income Per Share (2):
  Basic:
    From continuing operations           $     1.30   $    1.72  $      1.41   $    1.19   $     0.92
    Net income                                 1.30        1.72         1.23        1.19         0.92
  Diluted:
    From continuing operations           $     1.30   $    1.71  $      1.40   $    1.17   $     0.90
    Net income                                 1.30        1.71         1.22        1.17         0.90

Cash Dividends
  Share:
    Common stock                         $     0.16   $    0.16  $      0.16   $    0.12   $     0.10
    Class A Common stock                       0.08        0.08         0.08        0.06         0.05

Balance Sheet Data:
    Current assets                       $  259,779   $ 290,018  $   239,618   $ 204,198   $  157,089
    Current liabilities                     100,097      96,855       69,091      51,264       45,906
    Working capital                         159,682     193,163      170,527     152,934      111,183
    Total assets                            668,534     702,099      394,272     317,067      252,237
    Long-term obligations                   151,374     192,000            -           -            -
    Stockholders' equity                    399,700     398,786      314,218     257,258      200,544
</TABLE>

(1)  Consists  of  53  weeks.
(2)  In  Fiscal  1998,  the  Company  adopted the
     provisions of Statement of Financial Accounting Standards ("SFAS") No. 128,
     "Earnings  per  Share" which established new guidelines for the calculation
     of  earnings  per  share.  Basic  earnings  per share have been computed by
     dividing  net  income  by the weighted average number of shares outstanding
     during the year. Diluted earnings per share have been computed assuming the
     exercise  of  stock  options,  as well as their related income tax effects.
     Earnings  per  share  for  all  periods  have  been restated to reflect the
     provisions  of  this Statement.
(3)  In  April 1998,  the Company acquired Lux through the exchange of 2,070,286
     shares  of  the  Company's  common  stock for all of the outstanding common
     stock  of  Lux. The acquisition was accounted for as a pooling of interests
     and  accordingly,  the  accompanying  selected  financial  data  has  been
     retroactively  adjusted  to  include  the operations of Lux for all periods
     prior  to  the  acquisition.
(4)  The  Company  adopted a plan to discontinue the operation of its Just Nikki
     catalog  segment  in January 1999 (see Note 4 to the Consolidated Financial
     Statements  for  additional  information).


                                        8
<PAGE>


ITEM  7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF  OPERATIONS

FORWARD-LOOKING  STATEMENTS
---------------------------

The Private Securities Litigation Reform Act of 1995 ("the Act") provides a safe
harbor  for forward-looking statements made by or on behalf of the Company.  The
Company  and  its  representatives  may from time to time make written or verbal
forward-looking  statements,  including  statements  contained in this and other
Company  filings  with  the  Securities and Exchange Commission and in our press
releases  and  reports  to shareholders.  All statements which address operating
performance,  events  or developments that we expect or anticipate will occur in
the future, including statements relating to sales growth and earnings per share
growth  or  statements  about  future  operating  results,  are  forward-looking
statements  within  the  meaning of the Act.  The forward-looking statements are
and  will  be based on management's then current views and assumptions regarding
future  events  and  operating  performance.

RISK  FACTORS
-------------

The  following are some of the factors that could cause actual results to differ
materially from estimates contained in the Company's forward-looking statements:

Consumer  Preferences;  Impact  of  Economic  Conditions
--------------------------------------------------------

The  retail  fashion  accessories  and  apparel business fluctuates according to
changes  in  consumer  preferences  dictated  in part by fashion and season.  In
addition,  certain  economic conditions affect the level of consumer spending on
merchandise  offered  by  the  Company,  including,  among  others,  business
conditions,  unemployment,  interest  rates, energy costs, taxation and consumer
confidence  in  future  economic  conditions.  Consumer  preference and economic
conditions  may  differ  or change from time to time in each market in which the
Company  operates and directly impact the Company's net sales and profitability.

Merchandise  Inventory,  Replenishment  and  Distribution
---------------------------------------------------------

Fluctuations  in  the retail fashion accessories and apparel business especially
affect  the  inventory owned by fashion accessories and apparel retailers, since
merchandise  usually must be ordered well in advance of the season and sometimes
before  fashion  trends  are  identified or evidenced by customer purchases.  In
addition,  the  cyclical  nature  of the retail business requires the Company to
carry  a  significant  amount  of  inventory,  especially  prior to peak selling
seasons  when the Company and other retailers generally build up their inventory
levels.  The  Company must enter into contracts for the purchase and manufacture
of  merchandise  well in advance of the applicable selling season.  As a result,
the  Company  is  vulnerable  to  demand  and  pricing  shifts and to suboptimal
selection  and  timing  of  merchandise  purchases.

The  Company  reviews  its  inventory  levels  in  order to identify slow-moving
merchandise  and  uses markdowns to clear merchandise.  Markdowns may be used if
inventory  exceeds  customer  demand  for reasons of style, seasonal adaptation,
changes  in customer preference or lack of consumer acceptance of fashion items,
or  if  it  is  determined  that  the  inventory  in  stock will not sell at its
currently  marked price.  Such markdowns may have an adverse impact on earnings,
depending  on  the  extent  of  the  markdowns and amount of inventory affected.

Because  the  Company does not carry much replenishment inventory in its stores,
much  of  the  inventory  is maintained in the Company's distribution centers in
Hoffman  Estates, Illinois, Birmingham, England, Zurich, Switzerland and Vienna,
Austria.

The Company's distribution functions for all of its stores located in the United
States  and  Canada  are  handled from its single distribution center in Hoffman
Estates,  Illinois.  Any  significant  interruption  in  the  operation  of this
distribution center, due to natural disaster or otherwise, would have a material
effect on the Company's business, financial condition and results of operations.


                                        9
<PAGE>


Store  Operations  and  Expansion
---------------------------------

The  Company's  stores  are  distinctively designed for customer identification,
ease  of shopping and a wide variety of selection of merchandise which emphasize
style, quality and good value.  The range of merchandise displayed in each store
varies  significantly  depending on the selling season and the size and location
of  the  store.

Store  hours  are  dictated  by mall operators and the stores are typically open
from  10:00  A.M. to 9:00 P.M., Monday through Saturday, and, where permitted by
law,  from  Noon to 5:00 P.M. on Sunday.  Approximately 80% of sales are made in
cash,  with  the  balance  made  by  credit  cards.

The  Company's  continued success depends, in part, upon its ability to increase
sales at existing store locations, to open new stores and to operate stores on a
profitable  basis.  There  can  be  no  assurance that the Company's growth will
result  in  enhanced  profitability or that it will continue at the same rate in
future  years.

International  Expansion
------------------------

The  Company  continued  to  expand internationally in Fiscal 2001.  It is faced
with  competition  in  European  markets  from established regional and national
chains.  If  international expansion is not successful, the Company's results of
operations  could  be  adversely  affected.  The  Company's  ability  to  grow
successfully  in  the  continental  European  market  will  depend  in  part  on
determining  a  sustainable  profit  formula  to build customer loyalty and gain
market  share  in  the  especially challenging retail environments of France and
Germany.

Certain  financial  information  about  international operations is set forth in
Note  13  to the Company's Consolidated Financial Statements, included elsewhere
herein.

Impact  of  the  European  Monetary  Union
------------------------------------------

The  European  Union  is  comprised  of  fifteen  member states, eleven of which
adopted  a  common  currency,  the "Euro," effective January 1, 1999.  From that
date  until January 1, 2002, the transition period, the national currencies will
remain legal tender in the participating countries as denominations of the Euro.
Ultimately, the Euro will be the sole currency within the European Union and one
organization,  the  European  Central  Bank,  will  be  responsible  for setting
European  monetary  policy.  While  some  believe  that  the change will bring a
higher  level  of  competition  within  Europe  and  a greater sense of economic
stability  within that region, there is no certainty that the Company's activity
in  this  region  will  necessarily  realize  any  benefits  as a result of such
changes.  The  Company  is currently reviewing the impact of the Euro conversion
on  its  management information systems, accounting systems, vendor payments and
human  resources.  At  this  time, the Company cannot estimate the costs it will
incur  in  connection  with  the  Euro  conversion or determine whether the Euro
conversion  is  likely  to  have  a  material adverse effect on its business and
results  of  operations.

Suppliers
---------

The  Company  purchases  merchandise  from  approximately  850 suppliers located
domestically  and  overseas.  No  supplier  accounted  for  more  than 5% of the
Company's  Fiscal  2001 purchases. Of the Company's merchandise purchases during
Fiscal  2001, approximately 20% of all units purchased for the Fashion Accessory
stores  in  North  America  (representing  approximately 32% of total cost) were
purchased  domestically  while the remaining 80% of all units (68% of cost) were
purchased  from  outside  the  United States. Approximately 44% of the Company's
total  merchandise  units  purchased  for  the Fashion Accessory stores in North
America  (representing  50%  of cost) were from China, including Hong Kong, with
the  remainder  coming  from  11  other  countries.  Any  event causing a sudden
disruption of imports from China or other foreign countries, including political
instability  or  the  imposition of additional import restrictions, could have a
material  adverse  effect  on the Company's operations. Substantially all of the
Company's  foreign  purchases of merchandise are negotiated and paid for in U.S.
dollars.


                                       10
<PAGE>


The  Company  cannot  predict whether any of the countries in which its products
currently  are manufactured or may be manufactured in the future will be subject
to  additional  trade  restrictions  imposed  by  the  U.S.  and  other  foreign
governments,  including the likelihood, type or effect of any such restrictions.
Trade  restrictions,  including  increased  tariffs  or  quotas,  embargoes, and
customs  restrictions, against merchandise could increase the cost or reduce the
supply  of  merchandise  available  to  the  Company  and  adversely  affect the
Company's  business,  financial condition and results of operations. The Company
pursues  a diversified global sourcing strategy that includes relationships with
vendors  in  approximately  20  countries.  These  sourcing  operations  may  be
adversely  affected  by  political  and  financial  instability resulting in the
disruption  of  trade  from  exporting countries, significant fluctuation in the
value  of  the  U.S.  dollar  against  foreign  currencies,  restrictions on the
transfer  of  funds  and/or  other  trade  disruptions.

Seasonal  Business
------------------

The Company's business follows a seasonal pattern, peaking during the Christmas,
Easter  and back-to-school periods.  During Fiscal 2001, these periods accounted
for  approximately  30% of the Company's annual sales.  Any decrease in sales or
margins  during  these  periods  could  have  a  material  adverse effect on the
Company's  business,  financial  condition  and results of operations.  Seasonal
fluctuations  also  affect  inventory  levels,  since the Company usually orders
merchandise  in  advance  of  peak  selling  periods.  The  Company must carry a
significant  amount  of  inventory  in  anticipation  of  these selling periods.

Competition
-----------

The  Company's  business  is  highly  competitive.  The  Company  competes  with
national  and  local  department  stores,  specialty  and discount store chains,
independent  retail  stores  and  internet  and  catalog  businesses that market
similar  lines  of  merchandise.  Some  competitors have more resources than the
Company.  Given  the  large  number  of  companies  in  the retail industry, the
Company  cannot  estimate  the  number  of  its  competitors.

Depth  of  selection  in  sizes,  colors  and styles of merchandise, merchandise
procurement  and  pricing,  ability  to  anticipate  fashion trends and consumer
preferences, inventory control, reputation, quality of merchandise, store design
and  location,  and  customer  service  are  all  important factors in competing
successfully  in  the  retail  industry.

The  performance  of  the  Company  in  recent years has increased the amount of
imitation by other retailers.  Such imitation has made and will continue to make
the  retail  environment  in  which  the  Company  operates  more  competitive.

In addition, the Company's competitive position depends upon a number of factors
relating  to  consumer  spending, including future economic conditions affecting
disposable  consumer  income such as unemployment, business conditions, interest
rates,  energy  costs  and  taxation.  A decline in consumer spending on fashion
accessories  and  apparel  could have a material adverse effect on the Company's
net  sales  and  profitability.

Dependence  on  Mall  Traffic  and  the  Availability  of  Suitable  Lease Space
--------------------------------------------------------------------------------

Substantially  all  of  the  Company's  stores  are located in regional shopping
malls.  The  Company's  sales  are  derived,  in  part,  from the high volume of
traffic  in  those  malls.  The  Company benefits from the ability of the mall's
"anchor"  tenants,  generally  movie  theaters  and large department stores, and
other  area attractions to generate consumer traffic in its stores' vicinity and
the  continuing  popularity  of malls as shopping destinations for pre-teens and
teenagers.  Sales  volume and mall traffic may be adversely affected by economic
downturns in a particular area, competition from non-mall retailers, other malls
where  the  Company  does not have stores and the closing of anchor tenants in a
particular  mall.  In  addition,  a  decline  in the popularity of mall shopping
among  our target customers, pre-teens and teenagers, could affect the Company's
business.  In  recent  months, it appears there has been a noticeable decline in
mall  traffic.  The  Company  believes  this  has  resulted in a decrease in the
number  of  transactions per store, although such decrease has been offset by an
increase  in  average  transaction  size.


                                       11
<PAGE>


Since  the  Company is primarily a mall-based chain, the Company's future growth
is  significantly  dependent  on  its  ability  to  open new stores in desirable
locations.  There is no assurance as to when or whether such desirable locations
will  become  available.

Dependence  on  Key  Personnel
------------------------------

The  Company's  success  and  ability to properly manage its growth depends to a
significant  extent  both  upon the performance of its current senior management
team  and its ability to attract, hire, motivate and retain additional qualified
management  personnel  in  the future.  The inability to recruit and retain such
additional  personnel,  or  the  loss of service of any of the Company's current
executive  officers,  could  have  a  material  adverse  impact  on the Company.

The  foregoing  factors are not exclusive.  New factors emerge from time to time
and  it is not possible for management to predict all of such factors.  Further,
management  cannot  assess  the  impact  of  each  such  factor on the Company's
business or the extent to which any factor, or combination of factors, may cause
actual  results to differ materially from those contained in any forward looking
statements.

The  following  table  sets  forth, for the periods indicated, percentages which
certain  items  reflected  in  the financial statements bear to net sales of the
Company:

<TABLE>
<CAPTION>
                                                      FISCAL YEAR ENDED
                                               ------------------------------
                                                FEB. 3,   JAN. 29,   JAN. 30,
                                                 2001      2000       1999
                                               --------  ---------  ---------
<S>                                             <C>        <C>        <C>
Net sales                                        100.0%     100.0%     100.0%
  Cost of sales, occupancy and buying expenses    51.7       48.4       48.2
                                                --------  ---------  ---------
  Gross Profit                                    48.3       51.6       51.8
                                               --------  ---------  ---------

Other expenses:
  Selling, general and administrative             33.7       31.7       31.5
  Depreciation and amortization                    4.2        3.4        3.3
  Interest expense (income), net                   0.9       (0.4)      (0.9)
  (Gain) loss on investments                         -       (0.5)       0.7
  Impairment of long-lived assets                    -        1.0          -
                                               --------  ---------  ---------
                                                  38.8       35.2       34.6
                                               --------  ---------  ---------
  Income from continuing operations before
    income taxes                                   9.5       16.4       17.2

Income taxes                                       3.2        6.0        6.4
                                               --------  ---------  ---------
  Income from continuing operations                6.1       10.4       10.8
                                               --------  ---------  ---------

Discontinued operations, net of income taxes:
  Loss from discontinued operations                  -          -        0.9
  Loss on disposal of discontinued operations        -          -        0.5
                                               --------  ---------  ---------
Net loss from discontinued operations                -          -        1.4
                                               --------  ---------  ---------

  Net income                                       6.1%      10.4%       9.4%
                                               ========  =========  =========
</TABLE>

RESULTS  OF  CONTINUING  OPERATIONS
-----------------------------------

The  operating  results  of  Claire's  Nippon Co., Ltd., which are accounted for
under  the  equity  method,  are  not part of the consolidated group of Claire's
Stores,  Inc. and therefore not included in the following analysis.  Fiscal 1999
balances  have  been restated to reflect the accounts of Lux as if the Companies
had  combined  at  the  beginning  of  that  period.


                                       12
<PAGE>


FISCAL  2001  COMPARED  TO  FISCAL  2000
----------------------------------------

Net  sales  increased  by $213,519,000, or 25%, to $1,060,417,000 in Fiscal 2001
compared  to  $846,898,000  for the year ended January 29, 2000 ("Fiscal 2000").
This  increase  primarily  resulted  from  the  twelve  months  of  sales of the
Afterthoughts  stores,  (as  compared  with the two months included in the prior
fiscal  year),  offset  by  same-store  sales decreases of 1% for the year.  The
same-store  sales  decrease  was  primarily  a  result of fewer transactions per
store,  offset  by  an  increase in the average unit retail price of merchandise
sold.  The  same-store  sales  results  of  the  Afterthoughts  stores  were
significantly  below those of the Claire's Accessories stores for the two months
ended  February  3,  2001  due  to  a number of factors related primarily to the
difficult  process  of  integrating  Afterthoughts'  operations  into  Claire's.

Cost  of sales, occupancy and buying expenses increased by $138,404,000, or 34%,
to  $548,256,000  in Fiscal 2001 compared to $409,852,000 in Fiscal 2000.   As a
percentage  of  net  sales,  these  expenses  increased to 51.7% for Fiscal 2001
compared  to  48.4%  for  Fiscal 2000.  This increase of 330 basis points is the
result  of  additional  merchandise markdowns, transitional services provided by
Venator to Claire's during its integration of  the Afterthoughts stores and lack
of  leverage  on  fixed  costs.  These  markdowns  were  a  result of lower than
expected sales and helped the Company reduce inventory levels to be in line with
planned sales for future periods.  An approximately 150 basis point increase was
caused  by the full year impact of the Afterthoughts stores who's occupancy cost
as  a percentage of sales is higher than the Claire's stores.  This is primarily
due  to lower average store sales in the Afterthoughts stores as compared to the
average  Claire's  store.

Selling,  general and administrative ("SG&A") expenses increased by $89,729,000,
or  33%  to  $357,837,000  in  Fiscal  2001  from  the  Fiscal  2000  level  of
$268,108,000.  The  increase  noted  was  due  to  the  increase  in the cost of
operating  the  additional stores.  As a percentage of net sales, these expenses
increased  to  approximately  33.7%  in  Fiscal 2001 compared to 31.7% in Fiscal
2000.  The  increase  in SG&A as a percentage of sales is primarily attributable
to  certain redundant operations related to the integration of the Afterthoughts
division's  operations  and  the  lack  of leverage on corporate expenses due to
negative  same-store  sales.  The  Company  has  substantially  completed  its
integration  of  Afterthoughts  as  it  relates to store operations, payroll and
human  resources,  merchandising,  planning  and  distribution,  accounting  and
finance,  real  estate  and  construction  and  MIS.  Efforts  continue  on  the
integration  of  marketing,  field  operations  and  the  communication  of best
practices among divisions. Sales and SG&A were adversely affected as a result of
these  integration  efforts  during this fiscal year.  It has been the Company's
objective  to  close  a  number  of  underperforming  or  duplicative  acquired
Afterthoughts  stores.  To  date,  203  Afterthoughts stores have been closed or
leases not renewed, 11 stores have been opened resulting in 579 stores remaining
at  February  3,  2001.

Depreciation and amortization increased by $15,308,000 or 53%, to $44,149,000 in
Fiscal  2001  from  the  Fiscal  2000  level  of  $28,841,000.  The increase was
primarily  due to the full year amortization of goodwill and depreciation on the
Afterthoughts  stores.

Interest  expense  (income),  net  increased from ($3,469,000) in Fiscal 2000 to
$9,927,000  in  Fiscal  2001.  The  net increase of $13,396,000 is primarily the
result  of  the  full  year  effect  of  the Company's credit facility which was
entered  into  on  December 1, 1999.  In addition, the Company's interest income
decreased  due  to  lower  invested  cash  balances  during  the year due to the
Company's  acquisition  of  the  Afterthoughts  stores  in the fourth quarter of
Fiscal 2000 and the Cleopatre stores in the first quarter of Fiscal 2001 and the
Company's  purchase of approximately $50 million of common stock pursuant to the
$50  million  stock  repurchase  program  approved  in  Fiscal  2001.

In  Fiscal  2000,  the Company recognized a gain on investments of $3,929,000 in
connection  with  the  sale  of  certain  equity securities.  There have been no
transactions  of  this  nature  in  Fiscal  2001.


                                       13
<PAGE>


In  December  1999,  the  Company  began  a process to eliminate redundant field
operations and optimize square footage efficiency as a result of the acquisition
of  Afterthoughts.  As a result of the reorganization and the Company's periodic
review  of  impairment, the Company recorded an $8.7 million ($5.5 million after
tax,  or  $.11  per diluted share) non-cash charge in December 1999 to write off
the  assets  whose  carrying value had been impaired.  The Company recognized no
impairment  charges  in  Fiscal  2001.

Income  taxes decreased by $15,587,000 to $35,273,000 in Fiscal 2001 compared to
$50,860,000  in  Fiscal  2000.  The  Company's effective tax rates declined as a
result of increased profitable foreign operations which have lower effective tax
rates  than  the  United  States.

FISCAL  2000  COMPARED  TO  FISCAL  1999
----------------------------------------

Net  sales  increased  by  $185,042,000,  or 28%, to $846,898,000 in Fiscal 2000
compared  to  $661,856,000  for the year ended January 30, 1999 ("Fiscal 1999").
This  increase  resulted  primarily  from  the  net  addition  of  1,006 stores,
including  the  acquisition  of  Afterthoughts  effective  December  1,1999  and
same-store  sales  increases  of 5%.  The same-store sales increases were mainly
attributable to an increase in the average unit retail price of merchandise sold
in  Fiscal 2000 compared to Fiscal 1999 and an increase in the number of overall
transactions  per  store.

Cost  of  sales, occupancy and buying expenses increased by $90,785,000, or 28%,
to  $409,852,000  in  Fiscal  2000  compared  to  $319,067,000  in  Fiscal 1999.
Principal  reasons  for  this increase were the rise in the number of stores and
the  volume  of  merchandise sold.  As a percentage of net sales, these expenses
increased  slightly  to 48.4% for Fiscal 2000 compared to 48.2% for Fiscal 1999.
This  increase of 20 basis points is the result of decreased product margins due
to  increased  sales  from  the  Apparel  Stores.

Selling,  general and administrative ("SG&A") expenses increased by $59,477,000,
or  29%,  to  $268,108,000  in  Fiscal  2000  from  the  Fiscal  1999  level  of
$208,631,000.  The  increase  noted  was  due  to  the  increase  in the cost of
operating  the  additional stores.  As a percentage of net sales, these expenses
increased  to  approximately  31.7%  in  Fiscal 2000 compared to 31.5% in Fiscal
1999.  The  increase  in SG&A as a percentage of sales is primarily attributable
to  certain  redundant  operations  related  to  the  Afterthoughts acquisition.

Depreciation and amortization increased by $6,963,000, or 32%, to $28,841,000 in
Fiscal  2000  from  the  Fiscal  1999  level  of  $21,878,000.  The increase was
primarily  due to the investment in 1,006 new and acquired stores and remodeling
of  approximately  100  stores.

Due  to the balance in cash, cash equivalents and short-term investments and the
absence  of  long-term  debt  for  most  of  the year,  interest income exceeded
interest expense in Fiscal 2000.  As a percentage of sales, interest income, net
was  .4%  for  Fiscal 2000 compared to .9% in Fiscal 1999.  This decrease in net
interest  income  was  caused  by interest expense incurred on the debt facility
entered  into  on December 1, 1999 and lost interest income on the approximately
$55 million of cash used related to the Afterthoughts acquisition.  The cash and
cash equivalents, and short-term investments balance during Fiscal 2000 averaged
approximately  $138,642,000  compared  to  approximately  $149,561,000 in Fiscal
1999.

In  Fiscal  2000,  the  Company  recognized  a gain on investments of $3,929,000
compared to a loss on investments of $4,800,000 in Fiscal 1999.  The Fiscal 1999
loss  did not result from the sale of investments but rather from the write-down
of  investments, in accordance with Generally Accepted Accounting Principles, to
better  reflect  the  current  economic  value  of  the  investments.

In  December  1999,  the  Company  began  a process to eliminate redundant field
operations and optimize square footage efficiency as a result of the acquisition
of  Afterthoughts.  As a result of the reorganization and the Company's periodic
review  of  impairment, the Company recorded an $8.7 million ($5.5 million after
tax,  or  $.11  per diluted share) non-cash charge to write off the assets whose
carrying  value  had  been  impaired.


                                       14
<PAGE>


Income  taxes  increased by $8,776,000 to $50,860,000 in Fiscal 2001 compared to
$42,084,000  in Fiscal 1999. The Company's effective tax rates declined slightly
as  a  result  of  increased  profitable  foreign  operations  which  have lower
effective  tax  rates  than  the  United  States.

DISCONTINUED  OPERATIONS
------------------------

In  January  1999,  the  Company  announced  its  decision  to  discontinue  the
operations of Just Nikki, Inc. ("Nikki"), a wholly-owned subsidiary representing
its  catalog  segment.  The  operations  of  Nikki  have been accounted for as a
discontinued  operation  in  the  Fiscal 1999 consolidated financial statements.
Nikki  had  no  significant  operations  prior  to Fiscal 1999.  The Company has
completed  liquidating  Nikki's  inventory and remaining assets during the first
half  of  Fiscal  2000.

IMPACT  OF  INFLATION
---------------------

Inflation  has  not  affected the Company, as it has generally been able to pass
along  inflationary  increases  in  its  costs  through  increased sales prices.

LIQUIDITY  AND  CAPITAL  RESOURCES
----------------------------------

In  connection  with  the acquisition of Afterthoughts, the Company entered into
the  Credit  Facility pursuant to which it financed $200 million of the purchase
price.  The  Credit  Facility  includes  a  $40 million revolving line of credit
which  matures  on  December 1, 2004 and a $175 million five year term loan, the
first  installment  of  which  was  paid  on  December  31,  2000  with  future
installments, thereafter, payable on a quarterly basis through December 1, 2004.
The  Credit  Facility  is  prepayable  without penalty and bears interest at 100
basis  points  margin  over  the London Interbank Borrowing Rate.  The margin is
then  adjusted  periodically based on the Company's performance as it relates to
certain  financial  measurements.  The  Company  had $180 million outstanding on
this  facility  at  February  3,  2001.

Company  operations  have  historically  provided  a  strong, positive cash flow
which, together with the Company's cash balances, provides adequate liquidity to
meet  the  Company's  operational  needs  and  debt  obligations.  Cash and cash
equivalents  totaled  $111,663,000  at  the  end  of  Fiscal  2001.

Net  cash  provided  by  operating activities amounted to $105,632,000 in Fiscal
2001  compared  to  $104,215,000  in Fiscal 2000 and $85,816,000 in Fiscal 1999.
The  primary sources of net cash provided by operating activities was net income
of  $65  million,  adjusted  for  non-cash  items.  The  Company's current ratio
(current  assets  over  current  liabilities)  was  2.6:1.0  for Fiscal 2001 and
3.0:1.0  for  Fiscal  2000.

At  the  end of Fiscal 2001, the Company increased its investment in inventories
to  $112,104,000,  or  2%, from the Fiscal 2000 balance of $109,464,000.  During
this period inventory turnover decreased to 2.7X from 3.4X for Fiscal 2000.  The
increase  in inventories is due to planned same-store sales increases for Fiscal
2002.  In  addition,  inventories  on  a  per  square  foot  basis increased 3%.
Management believes inventories are appropriate given the increase in the number
of  stores  and  the  level  of  sales  currently  being  planned.

Net  cash  used  in  investing  activities  of  $51.6 million in Fiscal 2001 was
primarily  capital  expenditures  of  $45.5  million  and  funds  used  for  the
acquisition  of Cleopatre, offset by the sale of short-term investments.  During
Fiscal  2001,  the  Company  continued  to  expand  and  remodel its store base.
Significant  capital  projects  included  the  opening of 203 new stores and the
remodeling  of  134  stores.  Funds  expended for capital improvements in Fiscal
2001  totaled $45,459,000 compared to $48,866,000 in Fiscal 2000 and $45,211,000
in  Fiscal  1999.  In  Fiscal  2002,  capital  expenditures  are  expected to be
approximately  $45  million as the Company continues to invest in its store base
and  technology.


                                       15
<PAGE>


Net  cash  used  in  financing  activities  of  $77.3 million in Fiscal 2001 was
primarily the Company's purchase of common stock pursuant to the Company's share
repurchase  program  of  approximately  $50  million,  required  payments on the
Company's  Credit  Facility  of  $20 million and dividends paid of $7.8 million,
offset  by  proceeds  of  stock  options  exercised  during  the  year.

The Company has significant cash balances, a consistent ability to generate cash
flow  from  operations  and  available  funds  under its credit facilities.  The
Company  believes  that  it  will  be  able  to  maintain  its present financial
condition and liquidity and be able to finance its capital expenditure plans and
other  foreseeable  future  needs.

ITEM  7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

Foreign  Currency
-----------------

The  Company  is  exposed  to foreign currency exchange rate fluctuations on the
U.S.  dollar  value  of  foreign  currency  denominated  transactions  and  its
investment in foreign subsidiaries.  Based on the Company's average net currency
positions  in  Fiscal  2001,  the  potential loss due to a 10% adverse change on
foreign  currency  exchange  rates  could  be  significant  to  the  Company's
operations.

Interest  Rates
---------------

The  Company's  exposure to market risk for changes in interest rates is limited
to its cash, cash equivalents and debt.  Based on the Company's average invested
cash  balances  and  outstanding  debt during Fiscal 2001, a 10% decrease in the
average  effective  interest  rate  in  Fiscal  2001  would  not have materially
impacted  the  Company's  annual  net  interest  expense.

Recent  Accounting  Pronouncements
----------------------------------

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  No.  133 ("SFAS No. 133"), "Accounting for
Derivative  Instruments and Hedging Activities."  The new statement requires all
derivatives  to  be  recorded on the balance sheet at fair value and establishes
new  accounting  rules for hedging instruments.  In June 1999, the FASB deferred
the  effective  date  of  SFAS No. 133 for one year until fiscal years beginning
after  June  15,  2000.  We believe the impact that SFAS No. 133 will not have a
material  effect  on  our  Consolidated  Financial  Statements.

In  March 2000, the FASB issued FIN No. 44, "Accounting for Certain Transactions
Involving  Stock  Compensation." FIN No. 44 clarifies the application of APB No.
25,  "Accounting  for  Stock Issued to Employees."  The provisions of FIN No. 44
are  effective  July  1,  2000.  The  adoption  of  FIN  No.  44  did not have a
significant  impact on the Company's consolidated financial position, results of
operations  or  cash  flows.

ITEM  8.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA          PAGE  NO.
                                                                   ---------

Independent  Auditors'  Report                                         17

Consolidated Balance Sheets as of February 3, 2001 and
    January 29, 2000                                                   18

Consolidated Statements of Income and Comprehensive Income
    for the three fiscal years ended February 3, 2001                  19

Consolidated Statements of Changes in Stockholders' Equity
    for the three fiscal  years ended February 3, 2001                 20

Consolidated Statements of Cash Flows for the three fiscal
    years ended February 3, 2001`                                      21

Notes  to  Consolidated  Financial  Statements                         22


                                       16
<PAGE>


                       INDEPENDENT  AUDITORS'  REPORT

The  Board  of  Directors  and  Stockholders
Claire's  Stores,  Inc.

We have audited the accompanying consolidated balance sheets of Claire's Stores,
Inc.  and  subsidiaries  as  of  February  3, 2001 and January 29, 2000, and the
related  consolidated  statements of income and comprehensive income, changes in
stockholders'  equity  and  cash  flows  for each of the years in the three-year
period  ended February 3, 2001.  These consolidated financial statements are the
responsibility  of the Company's management. Our responsibility is to express an
opinion  on  these  consolidated  financial  statements  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material  respects, the financial position of Claire's Stores,
Inc.  and  subsidiaries  as  of  February  3, 2001 and January 29, 2000, and the
results  of  their  operations and their cash flows for each of the years in the
three-year  period  ended  February  3,  2001  in  conformity  with  accounting
principles  generally  accepted  in  the  United  States  of  America.



/S/KPMG  LLP
Fort  Lauderdale,  Florida
March  30,  2001


                                       17
<PAGE>


<TABLE>
<CAPTION>
                     CLAIRE'S STORES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


                                                         FEB. 3,     JAN. 29,
                                                           2001        2000
                                                        ----------  ----------
                                                            (In thousands)
<S>                                                     <C>         <C>
ASSETS
Current assets:
 Cash and cash equivalents                              $ 111,663   $ 137,414
 Short-term investments                                         -       3,456
 Inventories                                              112,104     109,464
 Prepaid expenses and other current assets                 36,012      39,684
                                                        ----------  ----------
     Total current assets                                 259,779     290,018
                                                        ----------  ----------

Property and equipment:
 Land and building                                         17,765      17,568
 Furniture, fixtures and equipment                        180,147     156,688
 Leasehold improvements                                   133,522     129,767
                                                        ----------  ----------
                                                          331,434     304,023
 Less accumulated depreciation and amortization          (160,317)   (137,244)
                                                        ----------  ----------
                                                          171,117     166,779
                                                        ----------  ----------

 Goodwill, net                                            204,269     211,982
 Prepaid expenses and other assets                         33,369      33,320
                                                        ----------  ----------

                                                        $ 668,534   $ 702,099
                                                        ==========  ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Current portion of long-term debt                      $  31,263   $   8,759
 Trade accounts payable                                    30,848      35,911
 Income taxes payable                                       2,313      17,149
 Dividends payable                                          1,916       2,045
 Accrued expenses                                          33,757      32,991
                                                        ----------  ----------
     Total current liabilities                            100,097      96,855
                                                        ----------  ----------

Long term liabilities:
 Long-term debt                                           151,374     192,000
 Deferred credits                                          17,363      14,458
                                                        ----------  ----------
                                                          168,737     206,458
                                                        ----------  ----------

Stockholders' equity:
 Preferred stock par value $1.00 per share; authorized
   1,000,000 shares, issued and outstanding 0 shares            -           -
 Class A common stock par value $.05 per share;
   authorized 20,000,000 shares, issued 2,846,354
   shares and 2,868,380 shares                                142         143
  Common stock par value $.05 per share; authorized
   150,000,000 shares, issued 45,930,363 shares and
   48,374,226 shares                                        2,297       2,419
 Additional paid-in capital                                29,825      29,291
 Accumulated other comprehensive income                    (7,221)       (228)
 Retained earnings                                        375,109     367,613
                                                        ----------  ----------
                                                          400,152     399,238
 Treasury stock, at cost, (109,882 shares)                   (452)       (452)
                                                        ----------  ----------
                                                          399,700     398,786
                                                        ----------  ----------
Commitments and contingencies
                                                        $ 668,534   $ 702,099
                                                        ==========  ==========
</TABLE>

See  accompanying  notes  to  consolidated  financial  statements.


                                       18
<PAGE>


<TABLE>
<CAPTION>
                      CLAIRE'S STORES, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


                                                         FISCAL YEAR ENDED
                                               -----------------------------------
                                                 FEB. 3,     JAN. 29,    JAN. 30,
                                                  2001         2000        1999
                                               -----------  ----------  ----------
                                             (In thousands except per share amounts)
<S>                                            <C>          <C>         <C>
Net sales                                      $1,060,417   $ 846,898   $ 661,856
Cost of sales, occupancy and buying expenses      548,256     409,852     319,067
                                               -----------  ----------  ----------
Gross profit                                      512,161     437,046     342,789
                                               -----------  ----------  ----------

Other expenses:
 Selling, general and administrative              357,837     268,108     208,631
 Depreciation and amortization                     44,149      28,841      21,878
 Interest expense (income), net                     9,927      (3,469)     (6,256)
 (Gain) loss on investments                             -      (3,929)      4,800
 Impairment of long-lived assets                        -       8,700           -
                                               -----------  ----------  ----------
                                                  411,913     298,251     229,053
                                               -----------  ----------  ----------
 Income from continuing operations before
   income taxes                                   100,248     138,795     113,736

Income taxes                                       35,273      50,860      42,084
                                               -----------  ----------  ----------

 Income from continuing operations                 64,975      87,935      71,652
                                               -----------  ----------  ----------

Discontinued operations:
 Loss from discontinued operations (less
   applicable income taxes)                             -           -       6,285
 Loss on disposal of discontinued operations
   (less applicable income taxes)                       -           -       3,087
                                               -----------  ----------  ----------
 Net loss from discontinued operations                  -           -       9,372
                                               -----------  ----------  ----------

 Net income                                        64,975      87,935      62,280

 Other comprehensive income:
   Foreign currency translation adjustments        (6,993)        667        (337)
                                               -----------  ----------  ----------
     Comprehensive income                      $   57,982   $  88,602   $  61,943
                                               ===========  ==========  ==========


Net income (loss) per share:
 Basic:
   From continuing operations                  $     1.30   $    1.72   $    1.41
   From discontinued operations                         -           -       (0.18)
                                               -----------  ----------  ----------
   Net income                                  $     1.30   $    1.72   $    1.23
                                               ===========  ==========  ==========


 Diluted:
   From continuing operations                  $     1.30   $    1.71   $    1.40
   From discontinued operations                         -           -       (0.18)
                                               -----------  ----------  ----------
   Net income                                  $     1.30   $    1.71   $    1.22
                                               ===========  ==========  ==========
</TABLE>

See  accompanying  notes  to  consolidated  financial  statements.


                                       19
<PAGE>


<TABLE>
<CAPTION>
                                            CLAIRE'S STORES, INC. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY


                                                                              ACCUMULATED
                                           CLASS A             ADDITIONAL        OTHER
                                           COMMON     COMMON     PAID-IN     COMPREHENSIVE    RETAINED    TREASURY
                                            STOCK     STOCK      CAPITAL        INCOME        EARNINGS     STOCK       TOTAL
                                          --------   -------   -----------  --------------   ---------   ---------   --------
<S>                                       <C>        <C>       <C>          <C>              <C>         <C>         <C>
                                                                    (In thousands)
Balance
 January 31, 1998                         $    145   $ 2,382   $    22,053  $         (558)  $ 233,688   $    (452)  $257,258
Net income                                       -         -             -               -      62,280           -     62,280
Issued shares for acquisition                    -         5         1,876               -           -           -      1,881
Stock options exercised                          -        14           419               -           -           -        433
Cash dividends ($.16 per Common
 share and $.08 per Class A
   Common share)                                 -         -             -               -      (7,892)          -     (7,892)

Distributions to former shareholders of
 pooled entity                                   -         -             -               -        (455)          -       (455)

Tax benefit from exercised stock
   options                                       -         -         1,050               -           -           -      1,050
Foreign currency translation
   adjustment                                    -         -             -            (337)          -           -       (337)
                                          --------   -------   -----------  --------------   ---------   ---------   --------
Balance
January 30, 1999                               145     2,401        25,398            (895)    287,621        (452)   314,218
Net income                                       -         -             -               -      87,935           -     87,935
Class A Common stock converted to
   Common stock                                 (2)        2             -               -           -           -          -

Stock options exercised                          -        16         2,693               -           -           -      2,709
Cash dividends ($.16 per Common
   share and $.08 per Class A
   Common share)                                 -         -             -               -      (7,943)          -     (7,943)

Tax benefit from exercised stock
   options                                       -         -         1,200               -           -           -      1,200
Foreign currency translation
   adjustment                                    -         -             -             667           -           -        667
                                          --------   -------   -----------  --------------   ---------   ---------   --------
Balance
January 29, 2000                               143     2,419        29,291            (228)    367,613        (452)   398,786
Net income                                       -         -             -               -      64,975           -     64,975
Class A Common stock converted to
Common stock                                    (1)        1             -               -           -           -          -
Purchase of treasury stock                       -         -             -               -           -     (49,913)   (49,913)
Retirement of treasury stock                     -      (127)            -               -     (49,786)     49,913          -
Stock options exercised                          -         4           474               -           -           -        478
Cash dividends ($.16 per Common
 share and $.08 per Class A
 Common share)                                   -         -             -               -      (7,693)          -     (7,693)

Tax benefit from exercised stock
 options                                         -         -            60               -           -           -         60
Foreign currency translation
 adjustment                                      -         -             -          (6,993)          -           -     (6,993)
                                          --------   -------   -----------  --------------   ---------   ---------   --------
Balance
February 3, 2001                          $    142   $ 2,297   $    29,825  $       (7,221)  $ 375,109   $    (452)  $399,700
                                          ========   =======   ===========  ==============   =========   =========   ========
</TABLE>

See  accompanying  notes  to  consolidated  financial  statements.


                                       20
<PAGE>


<TABLE>
<CAPTION>
                               CLAIRE'S STORES, INC. AND SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                         FISCAL YEAR ENDED
                                                                  ---------------------------------
                                                                   FEB. 3,    JAN. 29,    JAN. 30,
                                                                    2001        2000        1999
                                                                  ---------  ----------  ----------
                                                                            (In thousands)
<S>                                                               <C>        <C>         <C>
Cash flows from operating activities:
 Net income                                                       $ 64,975   $  87,935   $  62,280
 Adjustments to reconcile net income to net cash
     Provided by operating activities:
   Loss from discontinued operations, net of tax benefit                 -           -       6,285
   Loss on disposal of discontinued operations, net of tax benefit       -           -       3,087
   Depreciation and amortization                                    44,149      28,841      21,878
   Deferred income taxes                                             8,049         704      (1,484)
   (Gain) loss on investments                                            -      (3,929)      4,800
   Loss on retirement of property and equipment                      2,115         576       1,703
   Impairment of long-lived assets                                       -       8,700           -
 (Increase) decrease in -
   Inventories                                                      (3,023)    (11,268)     (9,711)
   Prepaid expenses and other assets                                 6,836     (29,155)    (12,719)
 Increase (decrease) in -
   Trade accounts payable                                           (6,226)     11,693       2,441
   Income taxes payable                                            (14,659)        345       6,103
   Accrued expenses                                                    512       6,278       6,578
   Deferred credits                                                  2,904       3,495       2,418
                                                                  ---------  ----------  ----------
Net cash provided by continuing operations                         105,632     104,215      93,659
Net cash used by discontinued operations                                 -           -      (7,843)
                                                                  ---------  ----------  ----------
Net cash provided by operating activities                          105,632     104,215      85,816
                                                                  ---------  ----------  ----------

Cash flows from investing activities:
 Acquisition of property and equipment                             (45,459)    (48,866)    (45,211)
 Acquisition of business, net of cash acquired                      (9,548)   (249,811)     (7,815)
 Sale (purchase) of short-term investments                           3,455      36,231     (28,842)
 Capital expenditures of discontinued operations                         -           -        (185)
 Acquisition of minority interest in a foreign subsidiary                -     (18,000)          -
                                                                  ---------  ----------  ----------

Net cash used in investing activities                              (51,552)   (280,446)    (82,053)
                                                                  ---------  ----------  ----------


Cash flows from financing activities:
 Principal borrowings (payments) on debt                           (20,082)    199,452      (1,617)
 Purchase of treasury stock                                        (49,913)          -           -
 Proceeds from stock options exercised                                 538       3,909       1,482
 Distribution to former shareholders of pooled entity                    -           -        (455)
 Dividends paid                                                     (7,839)     (7,929)     (7,781)
                                                                  ---------  ----------  ----------

Net cash (used in) provided by financing activities                (77,296)    195,432      (8,371)
                                                                  ---------  ----------  ----------

Effect of foreign currency exchange rate changes on cash
and cash equivalents                                                (2,535)        667        (337)
                                                                  ---------  ----------  ----------

Net (decrease) increase in cash and cash equivalents               (25,751)     19,868      (4,945)

Cash and cash equivalents at beginning of year                     137,414     117,546     122,491
                                                                  ---------  ----------  ----------

Cash and cash equivalents at end of year                          $111,663   $ 137,414   $ 117,546
                                                                  =========  ==========  ==========
</TABLE>

See  accompanying  notes  to  consolidated  financial  statements.


                                       21
<PAGE>


                     CLAIRE'S  STORES,  INC.  AND  SUBSIDIARIES
                   NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

1.  NATURE  OF  OPERATIONS  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

Nature  of  Operations  -  Claire's  Stores,  Inc.,  a  Florida Corporation, and
----------------------
subsidiaries  (collectively  the  "Company"),  is  a leading retailer of popular
priced fashion accessories and apparel targeted towards pre-teens and teenagers.
The Company operates stores throughout the United States, Canada, the Caribbean,
United  Kingdom,  Switzerland,  Austria,  Germany,  France,  Ireland  and Japan.

Reincorporation-  In  June  2000,  Claire's  Stores,  Inc.  completed  its
reincorporation  from  the  State  of Delaware to the State of Florida through a
merger  transaction.  In  accordance  with  generally  accepted  accounting
principles,  the merger and resulting reincorporation have been accounted for as
a reorganization of entities under common control at historical cost in a manner
similar to a pooling of interests.  Under this accounting method, the assets and
liabilities of the combined entities have been carried forward at their recorded
historical  book  values.

Principles  of  Consolidation/Reclassifications  -  The  consolidated  financial
-----------------------------------------------
statements  include  the  accounts  of  the  Company  and  its  wholly  owned
subsidiaries.  The  Company's  investment  in  its  Japanese  joint  venture  is
accounted  for  under the equity method.  All material intercompany balances and
transactions  have  been  eliminated  in  consolidation.  In  January  1999, the
Company  adopted  a  plan  to  discontinue its Just Nikki Inc. ("Nikki") catalog
segment.  In  April  1998,  the  Company  completed  its  acquisition  of  Lux
Corporation  ("Lux"),  which was accounted for as a pooling-of-interest business
combination.  As  a result of these two transactions, the consolidated financial
statements and notes thereto have been restated and reclassified for all periods
presented.

Fiscal  Year - The Company's fiscal year ends on the Saturday closest to January
------------
31.  Fiscal  year  2001  consisted of 53 weeks, while Fiscal years 2000 and 1999
each  consisted  of  52  weeks.

Cash  and  Cash  Equivalents  -  The  Company  considers  all highly liquid debt
----------------------------
instruments  purchased  with an original  maturity of three months or less to be
cash  equivalents.

Short-term  Investments  -  These  investments  consist  of  highly  liquid debt
-----------------------
instruments  purchased  with  a maturity greater than three months but less than
one  year  and equity securities.  The Company typically classified its debt and
equity  securities  as  available  for  sale.  Available for sale securities are
recorded at fair value.  Unrealized holding gains and losses, net of the related
tax  effect, on available for sale securities are excluded from earnings and are
reported  as  a  separate  component  of  stockholders'  equity  until realized.
Realized  gains  and  losses  from the sale of available for sale securities are
determined  on  a  specific  identification  basis.

A decline in the market value of any available for sale security below cost that
is  deemed  to be other than temporary results in a reduction in carrying amount
to  fair  value.  The impairment is charged to earnings and a new cost basis for
the  security  is established.  Dividend and interest income are recognized when
earned.

Inventories - Merchandise inventories are stated at the lower of cost or market.
-----------
Cost  is  determined  by  the first-in, first-out basis using the retail method.
Approximately 9% of the Company's inventory is maintained using the average cost
method  in  a  foreign  subsidiary.

Property  and  Equipment  -  Property  and  equipment  are  recorded  at  cost.
------------------------
Depreciation  is  computed on the straight-line method over the estimated useful
lives  of  the  building  and the furniture, fixtures and equipment, which range
from  three  to  twenty-five  years.  Amortization  of leasehold improvements is
computed  on  the  straight-line  method based upon the shorter of the estimated
useful  lives  of  the  assets  or  the  terms  of  the  respective  leases.

Goodwill  - Goodwill represents the excess of purchase price over the fair value
--------
of  net  assets  acquired.  It  is  amortized  on a straight-line basis over the
expected  periods  to  be  benefited,  generally twenty-five years.  The Company
assesses  the recoverability of this intangible asset by determining whether the
amortization  of  the  goodwill balance over its remaining life can be recovered
through undiscounted future operating cash flows of the acquired operation.  The
amount of goodwill impairment, if any, is measured based on projected discounted
future  operating  cash  flows  using  a  discount rate reflecting the Company's
average  cost of funds.  Accumulated amortization was $10,449,000 and $1,655,000
at  February  3,  2001  and  January  29,  2000,  respectively.


                                       22
<PAGE>


Net  Income  Per  Share  -  Basic  net income per share is based on the weighted
-----------------------
average  number  of  shares of Class A Common Stock and Common Stock outstanding
during the period (49,931,000 shares in Fiscal 2001, 50,985,000 shares in Fiscal
2000  and  50,649,000  shares  in  Fiscal  1999).  Diluted  net income per share
includes the dilutive effect of stock options (50,101,000 shares in Fiscal 2001,
51,334,000 shares in Fiscal 2000 and 51,108,000 shares in Fiscal 1999).  Options
to  purchase  560,500,  210,000  and  161,000  shares of common stock, at prices
ranging  from  $20.38 to $30.25 per share, $25.00 to $30.25 per share and $19.73
to $22.88 per share, respectively, were outstanding for the years ended February
3,  2001,  January  29,  2000  and  January 30, 1999, respectively, but were not
included  in  the computation of diluted earnings per share because the options'
exercise  prices were greater than the average market price of the common shares
for  the  respective  fiscal  year.

Income  Taxes  -  The  Company accounts for income taxes under the provisions of
-------------
Statement  of  Financial  Accounting  Standards ("SFAS") No. 109 which generally
requires  recognition  of  deferred  tax assets and liabilities for the expected
future  tax  consequences  of  events  that  have been included in the financial
statements  or  tax  returns.  Under  this  method,  deferred  tax  assets  and
liabilities  are  determined  based  on  the  difference  between  the financial
statement  carrying  amounts  and  tax  bases  of  assets and liabilities, using
enacted  tax  rates in effect for the year in which the differences are expected
to  reverse.  In  addition,  SFAS  No. 109 requires the adjustment of previously
deferred  income  taxes  for  changes  in  tax rates under the liability method.

Foreign  Currency  Translation  -  The  financial  statements  of  the Company's
------------------------------
foreign operations are translated into U.S. dollars.  Assets and liabilities are
translated  at  current  exchange  rates  while  income and expense accounts are
translated  at  the  average  rates  in  effect  during  the  year.  Resulting
translation  adjustments  are  accumulated as a component of other comprehensive
income.  Foreign  currency  gains  and  losses  resulting  from  transactions
denominated  in  foreign currencies, including intercompany transactions, except
for intercompany loans of a long-term investment nature, are included in results
of  operations.

Fair  Value  of  Financial  Instruments  -  The  Company's financial instruments
---------------------------------------
consist  primarily  of  current  assets, current liabilities and long term debt.
Current  assets and liabilities are stated at fair market value.  Long term debt
is  considered  to  approximate  market  value  due  to  the interest rate being
adjustable.

Use  of  Estimates  - The preparation of financial statements in conformity with
------------------
generally  accepted  accounting principles requires management to make estimates
and  assumptions  that affect the reported amounts of assets and liabilities and
disclosure  of  contingent  assets  and liabilities at the date of the financial
statements  and  the  reported  amounts  of  revenues  and  expenses  during the
reporting  period.  Actual  results  could  differ  from  those  estimates.

Impairment  of Long-Lived Assets - The Company accounts for long-lived assets in
--------------------------------
accordance  with  the provisions of SFAS No. 121, "Accounting for the Impairment
of  Long-Lived  Assets  and  for  Long-Lived  Assets  to  Be Disposed Of."  This
Statement  requires  that long-lived assets and certain identifiable intangibles
be  reviewed for impairment whenever events or changes in circumstances indicate
that  the carrying amount of an asset may not be recoverable.  Recoverability of
assets to be held and used is measured by a comparison of the carrying amount of
an  asset  to  future  net cash flows expected to be generated by the asset.  If
such  assets  are  considered to be impaired, the impairment to be recognized is
measured  by  the  amount  by which the carrying amount of the assets exceed the
fair value of the assets.  Assets to be disposed of are reported at the lower of
the  carrying  amount  or  fair  value  less  costs  to  sell.

In  December  1999, the Company began implementation of a reorganization plan to
eliminate redundant field operations and optimize square footage efficiency as a
result  of  the acquisition of Afterthoughts.  As a result of the reorganization
and  the  Company's  periodic review of impairment, the Company recorded an $8.7
million  ($5.5  million after tax) non-cash charge to write off the assets whose
carrying  value  had  been  impaired.


                                       23
<PAGE>


Stock  Options
--------------

Statement  of  Financial  Accounting Standards No. 123 ("SFAS 123"), "Accounting
for  Stock  Based  Compensation," allows entities to choose between a fair value
based  method  of  accounting  for  employee  stock  options  or  similar equity
instruments  and  the  intrinsic  value based method of accounting prescribed by
Accounting Principles Board Opinion No. 25 ("APB No. 25"), "Accounting for Stock
Issued  to  Employees."  Entities electing to account for employee stock options
or  similar  equity instruments under APB No. 25 must make pro forma disclosures
of  net  income and earnings per share as if the fair value method of accounting
had been applied.  The Company has elected to apply the provisions of APB No. 25
in  the  preparation  of  its  consolidated financial statements and provide pro
forma disclosure of net income and earnings per share as required under SFAS 123
in  the  notes  to  the  consolidated  financial  statements.

Recent  Accounting  Pronouncements
----------------------------------

In  April  1998,  the  American Institute of Certified Public Accountants issued
Statement  of  Position  98-5  ("SOP 98-5"), "Reporting of the Costs of Start-up
Activities."  SOP  98-5  is  effective for financial statements issued for years
beginning after December 15, 1998; therefore, the Company adopted its provisions
in  the  first quarter of Fiscal 2000.  SOP 98-5 requires that pre-opening costs
be  expensed  as  incurred.  Adoption  of this statement did not have a material
impact on the Company's financial position, results of operations or cash flows.

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  No.  133 ("SFAS No. 133"), "Accounting for
Derivative  Instruments  and  Hedging Activities" as amended by SFAS No. 137 and
No.  138.  The  new  statement  requires  all  derivatives to be recorded on the
balance  sheet  at  fair  value and establishes new accounting rules for hedging
instruments.  In June 1999, the FASB deferred the effective date of SFAS No. 133
for  one  year until fiscal years beginning after June 15, 2000.  We believe the
impact  that  SFAS  No.  133 will not have a material effect on our Consolidated
Financial  Statements.

In  March 2000, the FASB issued FIN No. 44, "Accounting for Certain Transactions
Involving  Stock  Compensation." FIN No. 44 clarifies the application of APB No.
25,  "Accounting  for  Stock Issued to Employees."  The provisions of FIN No. 44
are  effective  July  1,  2000.  The  adoption  of  FIN  No.  44  did not have a
significant  impact on the Company's consolidated financial position, results of
operations  or  cash  flows.

2.  ACQUISITIONS

In  February  2000,  the  Company  completed  its  acquisition  of  Cleopatre, a
privately  held 42 store fashion accessory chain with its headquarters in Paris,
France.  The  transaction  was  accounted for as a purchase.  The purchase price
was  approximately $11 million.  Excess purchase price over fair market value of
the  underlying assets, primarily fixed assets, rent deposits and inventory, was
allocated  to  goodwill,  which is being amortized over twenty- five years.  The
Company's  results  of  operations  include  Cleopatre's  from February 28, 2000
through  February  3,  2001.  Operating  results on a pro forma basis, including
Cleopatre  as  if  the  purchase  had  occurred  at the beginning of the periods
presented,  are  not  disclosed  due  to  immateriality.

In  February 1999, the Company paid $18,000,000 to the former owner of a foreign
subsidiary for the purchase of his minority interest and recorded this amount as
goodwill.

In  December 1999, the Company completed the acquisition of Afterthoughts, a 768
store  fashion  accessory  chain  operated  as a division of Venator Group, Inc.
("Venator").  The  transaction  was  accounted  for as a purchase.  The purchase
price  was  $250  million,  $200  million of which was financed through a credit
facility.  Excess  purchase  price  over  fair  market  value  of the underlying
assets,  primarily  fixed  assets  and  inventory,  was  allocated  primarily to
goodwill  and trademarks, which are being amortized over twenty-five years.  The
Company's  results  of  operations  include  Afterthoughts from December 1, 1999
through  January  29,  2000.

The  following table presents the fair value of assets acquired and the net cash
paid  for  the  acquisition  of  Afterthoughts  (in  thousands):

<TABLE>
<CAPTION>
<S>                                  <C>
Fair value of assets acquired        $ 69,400
Allocated value of intangibles        180,600
                                     ---------
Cash paid for acquisition             250,000
Cash acquired in acquisition             (189)
                                     ---------

Total cash paid in acquisition, net  $249,811
                                     =========
</TABLE>


                                       24
<PAGE>


In  April  1998,  the  Company  completed its acquisition of Lux, a closely held
specialty  apparel  chain  operating  under  the  name  of  "Mr.  Rags,"  in  a
stock-for-stock  merger.  The  stores  specialize  in  selling  clothing  and
accessories to the male teen market.  In connection with the merger, the Company
issued  2,070,286  shares  of  common  stock in exchange for all the outstanding
common  stock  of  Lux.  The  merger  has  been  accounted  for  as a pooling of
interests  business  combination.  Accordingly,  the  accompanying  consolidated
financial statements have been restated to include the accounts of Lux as if the
companies had combined at the beginning of the first period presented.  Prior to
the  merger,  Lux's fiscal year ended on November 30.  In recording the business
combination, Lux's prior year financial statements have been restated to conform
with  the  Company's  fiscal year end.  Net sales and net income of the separate
entities  for  the  periods  preceding the merger are as follows (in thousands):

<TABLE>
<CAPTION>
                                        THREE MONTHS    FISCAL YEAR
                                           ENDED          ENDED
                                        MAY 2, 1998   JAN. 30, 1999
                                        ------------  --------------
<S>                                     <C>           <C>
Net sales:
Claire's Stores, Inc. and subsidiaries  $    123,775  $      500,152
Lux Corporation                                9,187          36,602
                                        ------------  --------------
Combined                                $    132,962  $      536,754
                                        ============  ==============


Net income:
Claire's Stores, Inc. and subsidiaries  $      9,584  $       58,189
Lux Corporation                                  357           1,406
                                        ------------  --------------
Combined                                $      9,941  $       59,595
                                        ============  ==============
</TABLE>

In November 1998, the Company completed its acquisition of Bijoux One Trading AG
("Bijoux"),  a  privately  held  53-store  fashion  accessory  chain.  Bijoux,
headquartered  in  Zurich,  Switzerland, became a wholly-owned subsidiary of the
Company.  The transaction has been accounted for as a purchase and, accordingly,
Bijoux's  operations  have  been consolidated with the Company as of November 1,
1998.  The $9.4 million purchase price was comprised of cash and the issuance of
100,000  shares of the Company's stock, valued at $1.9 million.  Excess purchase
price over fair market value of the underlying assets was allocated to goodwill,
which  is  being  amortized  over twenty-five years.  Operating results on a pro
forma  basis,  including Bijoux as if the purchase had occurred at the beginning
of  the  periods  presented,  are  not  disclosed  due  to  immateriality.

3.  UNAUDITED  PRO  FORMA  FINANCIAL  INFORMATION

The  following  unaudited  pro  forma  financial information gives effect to the
acquisition  of  Afterthoughts  as if it had occurred on February 1, 1998.  This
unaudited  pro  forma  financial  information  includes  the  effects  of  (a)
amortization  of goodwill; (b) the interest income, net impact of the funds used
and  borrowed to consummate the acquisition and (c) the federal and state income
taxes  relating  to  the  other adjustments at a combined statutory rate of 38%.

Prior  to  the  acquisition, Afterthoughts operated as a division of Venator and
certain  overhead  costs  and  other expenses were allocated to Afterthoughts by
Venator.  Accordingly,  the  unaudited  pro forma financial information includes
such  overhead  costs  and  other  expenses.

The  unaudited  pro forma financial information may not be comparable to and may
not  be  indicative  of  the  Company's  results of operations subsequent to the
acquisition because Afterthoughts was not under common control or management and
had  different  capital  structures  during  the  periods  presented.

<TABLE>
<CAPTION>
                                           FISCAL YEAR ENDED
                                       ------------------------
                                          2000          1999
                                       ----------    ----------
                                  (In thousands, except for share data)
<S>                                    <C>           <C>
Net Sales                              $1,009,554    $  856,442
Income before taxes                       127,362        91,544
Net income                                 80,658        57,836
Earnings per common share, basic             1.58          1.14
Earnings per common share, diluted           1.57          1.13
</TABLE>


                                       25
<PAGE>


4.  DISCONTINUED  OPERATIONS

In  January  1999,  the  Company  announced  its  decision  to  discontinue  the
operations of Nikki, a wholly-owned subsidiary representing its catalog segment.
The  operations  of Nikki have been accounted for as a discontinued operation in
the  Fiscal  1999  consolidated  financial statements.  Nikki had no significant
operations  prior to Fiscal 1999.  The Company liquidated  Nikki's inventory and
sold  or  disposed  of  all the remaining assets during the first half of Fiscal
2000.   Nikki's  net  sales  during  Fiscal  1999  were  $14,717,000.

5.  CREDIT  FACILITIES

In  connection with the acquisition of Afterthoughts, the Company entered into a
$215 million senior credit facility (the "Credit Facility") pursuant to which it
financed $200 million of the purchase price.  The Credit Facility includes a $40
million  revolving  line  of credit which matures on December 1, 2004 and a $175
million five year term loan, the first installment of which was made on December
31,  2000  with  future  installments,  thereafter, payable on a quarterly basis
through December 1, 2004.  The Credit Facility is prepayable without penalty and
bears  interest  at  100 basis points margin over the London Interbank Borrowing
Rate  plus  a  25  basis  point  unused  line of credit fee.  The margin is then
adjusted  periodically  based  on  the  Company's  performance  as it relates to
certain  financial  measurements.  At  February  3,  2001,  $180  million  was
outstanding  under  this  facility,  bearing  interest  at  7.5%.

The  Credit  Facility  contains  covenants  including,  but  not  limited  to,
limitations  on investments, dividends and other restricted payments, incurrence
of  additional  debt  and  acquisitions,  as well as various financial covenants
customary  for  transactions  of  this  type.  These financial covenants require
maintenance  of  a  specified  current  ratio,  fixed  charge coverage ratio and
current  leverage  ratio.  The Company was in compliance with these covenants at
February  3,  2001.

The  Company's  non-U.S.  subsidiaries  have  credit  facilities  totaling
approximately  $2.6  million  with  banks.  The  facilities are used for working
capital  requirements,  letters  of  credit and various guarantees. These credit
facilities  have been arranged in accordance with customary lending practices in
their  respective  countries  of operation.  At February 3, 2001, the borrowings
totaled  $2,637,000,  bearing  interest  at  rates  at  approximately  5.5%.

The  scheduled  maturity  of  the Company's credit facilities are as follows (in
thousands):

<TABLE>
<CAPTION>
<S>           <C>
FISCAL YEAR:

2002          $ 30,000
2003            40,000
2004            40,000
2005            73,000
              --------
              $183,000
              ========
</TABLE>

6.  COMMITMENTS

The  Company  leases  retail  stores,  offices  and  warehouse space and certain
equipment  under operating leases which expire at various dates through the year
2025  with  options to renew certain of such leases for additional periods.  The
lease  agreements covering retail store space provide for minimum rentals and/or
rentals  based  on  a  percentage  of net sales.  Rental expense for each of the
three  fiscal  years  ended  February  3,  2001  was  as  follows:

<TABLE>
<CAPTION>
                                     2001      2000      1999
                                   --------  --------  --------
<S>                                <C>       <C>       <C>
(In thousands)
Minimum rentals                    $132,831  $ 97,646  $ 75,749
Rentals based on net sales            2,245     2,406     1,975
Other rental expense - equipment     23,733    18,302    13,565
                                   --------  --------  --------
Total rental expense               $158,809  $118,354  $ 91,289
                                   ========  ========  ========
</TABLE>


                                       26
<PAGE>


Minimum  aggregate  rental commitments under non-cancelable operating leases are
summarized  by  fiscal  year  ending  as  follows  (in  thousands):

<TABLE>
<CAPTION>
<S>         <C>
2002        $142,145
2003         129,821
2004         118,815
2005         105,229
2006          91,400
Thereafter   325,944
            --------
            $913,354
            ========
</TABLE>

Certain  leases  provide  for payment of real estate taxes, insurance and  other
operating  expenses  of the properties. In other leases, some of these costs are
included  in  the  basic  contractual  rental  payments.

7.  STOCKHOLDERS'  EQUITY

Preferred  Stock  -  The Company has authorized 1,000,000 shares of $1 par value
----------------
preferred  stock,  none  of which has been issued. The rights and preferences of
such  stock  may  be  designated  in  the  future  by  the  Board  of Directors.

Class A Common Stock - The Class A common stock has only limited transferability
--------------------
and  is  not  traded on any stock exchange or any organized market. However, the
Class A common stock is convertible on a share-for-share basis into Common stock
and  may  be  sold,  as  Common  stock, in open market transactions. The Class A
common  stock  has ten votes per share. Dividends declared on the Class A common
stock  are  limited  to  50%  of  the  dividends  declared  on the Common stock.

Treasury  Stock - Treasury stock acquired is recorded at cost. Occasionally, the
---------------
Company  uses  treasury  stock to fulfill its obligations under its stock option
plans.  When  stock is issued pursuant to the stock option plans, the difference
between  the  cost  of  treasury stock issued and the option price is charged or
credited  to  additional  paid-in  capital.

In  April  2000,  the  Company's Board of Directors approved a $50 million stock
repurchase  program.  In  connection  with this program, the Company repurchased
2,546,200  shares at a cost of approximately $50 million.  In December 2000, the
Company  retired  these  shares.

8.  STOCK  OPTIONS

In  August  1996, the Board of Directors of the Company adopted, and on June 16,
1997  the  Company's stockholders approved, the Claire's Stores, Inc. 1996 Stock
Option  Plan and, then on June 8, 2000, the first amendment thereto (as amended,
the  "1996  Plan").  The 1996 Plan replaced the Company's 1991 Stock Option Plan
(the  "1991 Plan"), which had replaced the Company's 1982 Incentive Stock Option
Plan  (the  "1982  Plan") and the Company's 1985 Non-Qualified Stock Option Plan
(the  "1985  Plan"),  although  options  granted  under  the  1991  Plan  remain
outstanding.  Under  the 1996 Plan, the Company may grant either incentive stock
options  or  non-qualified  stock  options to purchase up to 4,000,000 shares of
Common Stock, plus any shares unused or recaptured under the 1982 Plan, the 1985
Plan  or the 1991 Plan.  Incentive stock options granted under the 1996 Plan are
exercisable  at  prices  equal to the fair market value of shares at the date of
grant,  except that incentive stock options granted to any person holding 10% or
more of the total combined voting power or value of all classes of capital stock
of  the Company, or any subsidiary of the Company, carry an exercise price equal
to  110% of the fair market value at the date of grant.  The aggregate number of
shares granted to any one person may not exceed 500,000, and no stock option may
be  exercised  less  than one year after the date granted.  Each incentive stock
option  or non-qualified stock option will terminate ten years after the date of
grant  (or  such  shorter  period  as  specified  in  the  grant) and may not be
exercised  thereafter.


                                       27
<PAGE>


Incentive  stock  options currently outstanding are exercisable at various rates
beginning  one  year  from the date of grant, and expire five to ten years after
the  date  of  grant.  Non-qualified  stock  options  currently  outstanding are
exercisable  at  prices equal to the fair market value of the shares at the date
of  grant  and  expire  five  to  ten  years  after  the  date  of  grant.

Options  to  purchase an additional 927,599 shares were outstanding, but not yet
exercisable,  at  February  3, 2001 under the 1991 Plan and the1996 Plan.  There
were  3,893,673  shares of Common stock available for future option grants under
the  1996  Plan  at  February 3, 2001 (which includes shares recaptured from the
previous  plans).

A  summary  of  the  activity  in  the Company's stock option plans is presented
below:

<TABLE>
<CAPTION>
                                              FISCAL 2001              FISCAL 2000              FISCAL 1999
                                         -----------------------  -----------------------  -----------------------
                                                       WEIGHTED                 WEIGHTED                 WEIGHTED
                                            NUMBER      AVERAGE      NUMBER      AVERAGE      NUMBER      AVERAGE
                                              OF       EXERCISE        OF       EXERCISE        OF       EXERCISE
                                            SHARES       PRICE       SHARES       PRICE       SHARES       PRICE
                                         ------------  ---------  ------------  ---------  ------------  ---------
<S>                                       <C>          <C>         <C>          <C>         <C>          <C>
Outstanding at beginning of period         1,191,824   $   18.21    1,222,291   $   13.66    1,466,144   $   10.81
Options granted                              605,000   $   17.82      536,000   $   25.08      455,000   $   19.27
Options exercised                            (80,310)  $    5.95     (296,100)  $    8.28     (331,313)  $    6.02
Options canceled                            (356,250)  $   16.39     (270,367)  $   22.83     (367,540)  $   16.37
                                         ------------  ---------  ------------  ---------  ------------  ---------
Outstanding at end of period               1,360,264   $   19.24    1,191,824   $   18.21    1,222,291   $   13.66
                                         ============  =========  ============  =========  ============  =========


Exercisable at end of period                 432,665   $   17.54      348,772   $   14.81      484,987   $   10.69
                                         ============  =========  ============  =========  ============  =========

Weighted average fair value of options
granted during the period (see below)                  $   11.06                $   24.92                $   19.27
</TABLE>

The  fair value of each option grant is estimated on the date of grant using the
Black-Scholes  option  pricing  model  with  the  following  assumptions:

<TABLE>
<CAPTION>
                                                2001                  2000                  1999
                                               ------                ------                ------
<S>                                <C>        <C>        <C>        <C>        <C>        <C>
Expected dividend yield                         0.65%                 0.64%                 0.72%
Expected stock price volatility                50.00%                37.65%                36.62%
Risk-Free interest rate                         6.14%                 6.00%                 5.50%
Expected life of options            4.5 and 9.5 years     4.5 and 9.5 years     4.5 and 9.5 years
</TABLE>

The  following  table  summarizes information about stock options outstanding at
February  3,  2001:

<TABLE>
<CAPTION>
                                    OPTIONS OUTSTANDING          OPTIONS EXERCISABLE
                           ------------------------------------  --------------------
                                          WEIGHTED
                                          AVERAGE     WEIGHTED              WEIGHTED
                            NUMBER OF    REMAINING     AVERAGE    NUMBER     AVERAGE
                             SHARES     CONTRACTUAL   EXERCISE      OF      EXERCISE
Range of Exercise Prices   OUTSTANDING     LIFE         PRICE     SHARES      PRICE
                           -----------  -----------  ----------  --------  ----------
<S>                        <C>                <C>    <C>        <C>        <C>
5.11 to $17.75                249,764          5.7   $   11.65    90,510   $   10.60
17.81 to $17.81               300,000          9.0   $   17.81         0   $    0.00
17.92 to $19.73               272,500          5.0   $   18.09   266,250   $   18.08
20.37 to $21.56               315,000          8.0   $   20.81    46,589   $   21.17
21.75 to $30.25               223,000          7.6   $   28.82    29,316   $   28.33
                           -----------  -----------  ----------  --------  ----------
5.11 to $30.25              1,360,264          7.2   $   19.24   432,665   $   17.54
                           ===========  ===========  ==========  ========  ==========
</TABLE>


                                       28
<PAGE>


The Company  adopted  SFAS  No.  123, "Accounting for Stock-Based Compensation",
issued  in October 1995.  As permitted under the provisions of SFAS No. 123, the
Company  applies the principles of APB Opinion 25 and related Interpretations in
accounting  for  its  stock  option  plans  and, accordingly, does not recognize
compensation  cost.  If  the  Company had elected to recognize compensation cost
based  on  the  fair value of the options granted at grant date as prescribed by
SFAS  No.  123, net income and earnings per share would have been reduced to the
pro  forma  amounts  indicated in the table below (in thousands except per share
amounts):

<TABLE>
<CAPTION>
                                                FISCAL YEAR ENDED
                                            -------------------------
                                             2001     2000     1999
                                            -------  -------  -------
<S>                                         <C>      <C>      <C>
Net income - as reported                    $64,975  $87,935  $62,280
Net income - pro forma                       63,847   87,217   61,971
Basic net income per share - as reported       1.30     1.72     1.23
Basic net income per share - proforma          1.28     1.71     1.22
Diluted net income per share - as reported     1.30     1.71     1.22
Diluted net income per share - pro forma       1.27     1.70     1.21
</TABLE>

9.  EMPLOYEE  BENEFIT  PLANS

Profit  Sharing  Plan
---------------------

The  Company  has  adopted  a  Profit  Sharing  Plan under Section 401(k) of the
Internal  Revenue  Code.  This  plan  allows employees who serve more than 1,000
hours  per  year to defer up to 18% of their income through contributions to the
plan.  In  line  with  the provisions of the plan, for every dollar the employee
contributes  the  Company  will  contribute  an additional $.50, up to 2% of the
employee's  salary.  In  Fiscal  2001,  Fiscal 2000 and Fiscal 1999, the cost of
Company  matching  contributions  was  $439,000,  $435,000  and  $378,000,
respectively.

Prior to the Lux merger (see Note 2), Lux had a profit sharing plan covering all
employees  over 21 years old with over one year of service.  Lux's contributions
to  the  plan  were  discretionary.  The  Company  discontinued this plan during
Fiscal  2000.

Deferred  Compensation  Plans
-----------------------------

In  August  1999,  the Company adopted a deferred compensation plan that enables
certain  associates of the Company to defer a specified percentage of their cash
compensation.  The  plan generally provides for payments upon retirement, death,
or  termination  of employment.  Participants may elect to defer a percentage of
their  cash compensation while the Company contributes a specified percentage of
the  participants'  cash compensation based on the participants' number of years
of  service.  All  contributions  are  immediately  vested.  The  Company's
obligations under this plan are funded by making contributions to a rabbi trust.
Assets  held  under  this  plan are included in cash and cash equivalents on the
Company's  balance  sheet  and totaled $682,000 and $249,000 at February 3, 2001
and  January 29, 2000 respectively.  The obligations under the plan are included
in  accrued  expenses.  Total Company contributions were $154,000 and $61,000 in
fiscal  2001  and  2000,  respectively.

Incentive  Compensation  Plan
-----------------------------

In  Fiscal  2001,  the Company adopted, which was also approved by the Company's
shareholders,  an  incentive  compensation  plan  for the Chairman of the Board.
Under  this  plan,  a  percentage  equal to twice the percentage increase in the
consolidated  pretax  income  of the Company over the prior fiscal year, will be
applied  against  the  Chairman  of  the  Board's base salary in determining the
amount of incentive compensation earned.  No amounts were paid or accrued during
Fiscal  2001  by  the  Company  pursuant  to  this  plan.


                                       29
<PAGE>


10.  INCOME  TAXES

Income  before  income  taxes  from  continuing  operations  is  as  follows:

<TABLE>
<CAPTION>
                      FISCAL YEAR ENDED
                ----------------------------
                  2001      2000      1999
                --------  --------  --------
                       (In thousands)
<S>             <C>       <C>       <C>
Domestic        $ 73,335  $114,962  $ 92,461
Foreign           26,913    23,833    21,275
                --------  --------  --------
                $100,248  $138,795  $113,736
                ========  ========  ========
</TABLE>

The  components  of  income  tax  expense  (benefit)  consist  of the following:

<TABLE>
<CAPTION>
                                                             FISCAL YEAR ENDED
                                                      -------------------------------
                                                      FEB. 3,   JAN. 29,    JAN. 30,
                                                        2001      2000        1999
                                                      --------  ---------  ----------
                                                              (In thousands)
<S>                                                   <C>       <C>        <C>
Federal:
    Current                                           $ 18,968  $  36,507  $  32,095
    Deferred                                             7,293        631     (1,266)
                                                      --------  ---------  ----------
                                                        26,261     37,138     30,829
                                                      --------  ---------  ----------
State:
    Current                                              2,556      5,149      4,473
    Deferred                                               756         73       (218)
                                                      --------  ---------  ----------
                                                         3,312      5,222      4,255
                                                      --------  ---------  ----------

Foreign:
    Current                                              5,700      8,500      7,000
                                                      --------  ---------  ----------

Total income tax expense from continuing operations     35,273     50,860     42,084
Tax benefit of discontinued operations                       -          -     (5,531)
                                                      --------  ---------  ----------
Total income tax expense                              $ 35,273  $  50,860  $  36,553
                                                      ========  =========  ==========
</TABLE>

The  approximate  tax  effect  on  each  type  of  significant components of the
Company's  net  deferred  tax  asset  are  as  follows:

<TABLE>
<CAPTION>
                                     FISCAL YEAR ENDED
                                   ---------------------
                                    FEB. 3,    JAN. 29,
                                     2001        2000
                                   ---------  ----------
                                     (In thousands)
<S>                                <C>        <C>
Deferred tax assets:
    Depreciation                   $    723   $   4,888
    Accrued expenses                    729       2,815
    Deferred rent                       955       2,690
    Inventory reserves                    5          68
    Other                                 -         242
Net operating loss carryforwards      1,565           -
                                   ---------  ----------
Total gross deferred tax assets       3,977      10,703

Valuation allowance                  (1,565)          -
                                   ---------  ----------
Total deferred tax assets, net        2,412      10,703
                                   ---------  ----------

Deferred tax liabilities:
    Operating leases                   (506)       (906)
    Other                              (158)          -
                                   ---------  ----------
Total deferred tax liabilities         (664)       (906)
                                   ---------  ----------

Net deferred tax asset             $  1,748   $   9,797
                                   =========  ==========
</TABLE>


                                       30
<PAGE>


The provision for income taxes from continuing operations differs from an amount
computed  at  the  statutory  rates  as  follows:

<TABLE>
<CAPTION>
                                                          FEB. 3,   JAN. 29,   JAN. 30,
                                                            2001      2000       1999
                                                          --------  ---------  ---------
<S>                                                       <C>       <C>        <C>
U.S. income taxes at statutory rates                           35%        35%        35%
Foreign income tax benefit at less than domestic rate          (3)        (1)        (1)
State and local income taxes, net of federal tax benefit        3          3          3
                                                          --------  ---------  ---------
                                                               35%        37%        37%
                                                          ========  =========  =========
</TABLE>

The Company believes that the realization of the net deferred tax assets is more
likely  than  not,  based  on the expectation that the Company will generate the
necessary  taxable  income  in future periods. As of February 3, 2001, there are
accumulated unremitted earnings from the Company's foreign subsidiaries on which
deferred  taxes  have  not  been  provided  as the undistributed earnings of the
foreign  subsidiaries  are indefinitely reinvested.  Based on the current United
States  and  foreign  subsidiaries income tax rates, it is estimated that United
States taxes, net of foreign tax credits, of approximately $7.6 million would be
due  upon  repatriation.

As  of  February  3, 2001, foreign subsidiaries of the Company had available net
operating  loss (NOL) carryforwards of approximately $4.6 million for income tax
purposes,  of  which,  $2.2 million has an indefinite expiration.  The remaining
$2.4  million  expires  between the years 2001 and 2004.  Generally, a valuation
allowance  has  been  established for these carryforwards because the ability to
utilize  them  is  uncertain.

11.  STATEMENTS  OF  CASH  FLOWS

Payments  of income taxes were $42,060,000 in Fiscal 2001, $46,987,000 in Fiscal
2000  and  $33,299,000 in Fiscal 1999.  Payments of interest were $12,918,000 in
Fiscal  2001,  $1,496,000  in  Fiscal  2000  and  $67,000  in  Fiscal  1999.

12.  RELATED  PARTY  TRANSACTIONS

The  Company  leases  from  Rowland  Schaefer & Associates (formerly Two Centrum
Plaza Associates) approximately 33,000 square feet of office space in a building
where  it maintains its executive and accounting and finance offices.  The lease
for this space expires on July 31, 2005 and may be extended at the option of the
Company  for  an  additional five-year term.  Rowland Schaefer & Associates is a
general  partnership  of  two  corporate general partnerships which are owned by
immediate  family  members  of  the  Chairman  of the Board and President of the
Company,  two  of  whom are Co-Vice Chairmen of the Company.  The lease provides
for  the  payment  by the Company of annual base rent of approximately $574,000,
which  is  subject to annual cost-of-living increases, and a proportionate share
of  all taxes and operating expenses of the building.  The Company believes that
the  terms  of  the  lease are no less favorable to the Company than those which
could  have  been  obtained  from  an  unrelated  third  party.


                                       31
<PAGE>


13.  SELECTED  QUARTERLY  FINANCIAL  DATA  (UNAUDITED)

<TABLE>
<CAPTION>
                                                FISCAL YEAR ENDED FEBRUARY 3, 2001
                                         --------------------------------------------------
                                          1ST QTR   2ND QTR   3RD QTR   4TH QTR     YEAR
                                         --------  --------  --------  --------  ----------
                                             (In thousands except per share amounts)

<S>                                      <C>       <C>       <C>       <C>       <C>
Net sales                                $232,000  $251,982  $247,536  $328,898  $1,060,417
Gross profit                              103,604   126,931   120,031   161,593     512,161
Net income                                  3,993    17,112    13,844    30,025      64,975

Basic net income per share               $   0.08  $   0.34  $   0.28  $   0.62  $     1.30

Diluted net income per share             $   0.08  $   0.34  $   0.28  $   0.61  $     1.30



                                                FISCAL YEAR ENDED JANUARY 29, 2000
                                         --------------------------------------------------
                                          1ST QTR   2ND QTR   3RD QTR   4TH QTR  YEAR
                                         --------  --------  --------  --------  ----------
                                             (In thousands except per share amounts)

Net sales                                $170,663  $186,090  $182,750  $307,395  $  846,898
Gross profit                               85,670    94,487    90,092   166,797     437,046
Net income                                 13,800    20,320    12,726    41,089      87,935

Basic net income per share               $   0.27  $   0.40  $   0.25  $   0.80  $     1.72

Diluted net income per share             $   0.27  $   0.40  $   0.25  $   0.80  $     1.71
</TABLE>


                                       32
<PAGE>


14.  SEGMENT  REPORTING

The  Company  is primarily organized based on the geographic markets in which it
operates.  Under  this organizational structure, the Company currently has three
reportable  segments:  North American Accessory, International Accessory and the
Apparel  Stores.

Information  about  the  Company's  operations  by  segment  is  as  follows (in
thousands):

<TABLE>
<CAPTION>
                                                               FISCAL YEAR ENDED
                                                       --------------- -----------------
                                                          2001        2000       1999
                                                       -----------  ---------  ---------
<S>                                                    <C>          <C>        <C>
Net sales:
       North American Accessory                        $  764,154   $625,652   $523,370
       International Accessory                            182,561    139,196     82,414
       Apparel Stores                                     113,702     82,050     56,072
                                                       -----------  ---------  ---------

Total net sales                                        $1,060,417   $846,898   $661,856
                                                       ===========  =========  =========


Operating income (loss):
       North American Accessory                        $  123,065   $143,502   $109,873
       International Accessory                             32,662     31,182     17,610
       Apparel Stores                                      (1,403)    (5,746)     6,675
                                                       -----------  ---------  ---------

Total operating income                                 $  154,324   $168,938   $134,158
                                                       ===========  =========  =========


Depreciation and amortization:
       North American Accessory                        $   34,039   $ 22,442   $ 18,245
       International Accessory                              8,000      4,658      2,409
       Apparel Stores                                       2,110      1,741      1,224
                                                       -----------  ---------  ---------

Total depreciation and amortization                    $   44,149   $ 28,841   $ 21,878
                                                       ===========  =========  =========


Interest expense (income), net:
       North American Accessory                        $   11,254   $ (2,398)  $ (5,960)
       International Accessory                             (1,330)    (1,075)      (317)
       Apparel Stores                                           3          4         21
                                                       -----------  ---------  ---------

Total interest expense (income), net                   $    9,927   $ (3,469)  $ (6,256)
                                                       ===========  =========  =========


Loss (gain) on investments                                      -   $ (3,929)  $  4,800
                                                       ===========  =========  =========


Impairment of long-lived assets                                 -   $  8,700   $      -
                                                       ===========  =========  =========


Income from continuing operations before income taxes  $  100,248   $138,795   $113,736
                                                       ===========  =========  =========


Identifiable assets:
       North American Accessory                        $  225,372   $442,234   $187,226
       International Accessory                            128,934     93,057     49,746
       Apparel Stores                                      34,840     28,540     18,197
       Corporate                                          279,388    138,268    139,103
                                                       -----------  ---------  ---------

Total assets                                           $  668,534   $702,099   $394,272
                                                       ===========  =========  =========


Capital expenditures:
       North American Accessory                        $   25,004   $ 25,025   $ 30,597
       International Accessory                             18,401     17,324     10,405
       Apparel Stores                                       2,054      6,517      4,209
                                                       -----------  ---------  ---------

Total capital expenditures                             $   45,459   $ 48,866   $ 45,211
                                                       ===========  =========  =========
</TABLE>


                                       33
<PAGE>


Identifiable  assets are those assets that are identified with the operations of
each  segment.  Corporate  assets  consist  mainly of cash and cash equivalents,
investments  in  affiliated  companies  and  other  assets.  Operating  income
represents  gross  profit  less  selling,  general  and  administrative  costs.
Approximately  14%,  14%  and  12% of the Company's net sales were in the United
Kingdom  for  Fiscal  Years'  2001,  2000  and  1999,  respectively.


ITEM  9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL  DISCLOSURE

None.

                                 PART  III

ITEMS  10,11,12  AND  13.  DIRECTORS  AND  EXECUTIVE OFFICERS OF THE REGISTRANT;
EXECUTIVE  COMPENSATION;  SECURITY  OWNERSHIP  OF  CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT;  AND  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.

The  information  called for by Items 10, 11, 12 and 13 will be contained in the
Company's  definitive  Proxy  Statement  for  its  2001  Annual  Meeting  of
Stockholders,  to  be filed with the Securities and Exchange Commission no later
than  120 days after the end of the Company's fiscal year covered by this report
pursuant  to  Regulation  14A  under  the  Securities  Exchange  Act of 1934, as
amended,  and  is  incorporated  herein  by  reference.

                                 PART  IV

ITEM  14.  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  AND  REPORTS  ON FORM 8-K

(a)  List  of  documents  filed  as  part  of  this  report.
                                                                       Page  No.
                                                                       ---------
     1. FINANCIAL  STATEMENTS

        Independent  Auditors'  Report                                        17
        Consolidated  Balance  Sheets  as  of  February  3,  2001  and
          January  29,  2000                                                  18
        Consolidated  Statements  of  Income  and  Comprehensive  Income
          for  the  three  fiscal  years  ended  February  3,  2001           19
        Consolidated  Statements  of  Changes  in  Stockholders'
          Equity  for  the  three  fiscal  years  ended  February  3,  2001   20
        Consolidated  Statements  of  Cash  Flows
          for  the  three  fiscal  years  ended  February  3,  2001           21
        Notes  to  Consolidated  Financial  Statements                        22

     2. FINANCIAL  STATEMENT  SCHEDULES

All  schedules  have  been omitted since the required information is included in
the  consolidated  financial  statements  or  the  notes thereto, or the omitted
schedules  are  not  applicable.

     3. EXHIBITS

     (2)(a)  Agreement  and  Plan  of Merger dated as of March 9, 1998 among the
          Company,  CSI  Acquisition Corp., Lux Corporation, and David Shih, Eva
          Shih,  Daniel  Shih,  Douglas  Shih,  the  Shih  Irrevocable Trust and
          Crestwood Partners LLC, as amended by letter amendment dated March 23,
          1998  and  addendum  thereto  dated  March  24,  1998 (incorporated by
          reference to exhibit 2 (a) to the Company's Annual Report on form 10-K
          for  the  fiscal  year  ended  January  30,  1999).


                                   34
<PAGE>


     (2)(b)  Stock  Purchase Agreement dated as of November 11, 1998 between the
          Company  and  Peter  Bossert,  an  individual,  for  any  and  all
          shares/Company  contributions  of: Bijoux One AG, Zurich, Switzerland,
          Bijoux One Trading AG, Zurich, Switzerland, Bijoux One Trading GesmbH,
          Brunn  am Gebirge, Austria and Bosco GmbH, Stuttgart, Germany (omitted
          schedules  will  be  furnished  supplementally  to the Commission upon
          request  (incorporated  by reference to exhibit 2 (b) to the Company's
          Annual  Report  on  form  10-K  for  the fiscal year ended January 30,
          1999).

     (2)(c)  Asset  Purchase  Agreement,  dated  as  of November 1, 1999, by and
          between  the  Company,  Venator  Group, Inc., Venator Group Specialty,
          Inc.,  Venator  Group  Canada, Inc., Afterthoughts Boutiques, Inc. and
          Afterthoughts  (incorporated  by  reference  to  Exhibit  2.1  to  the
          Company's  Current  Report  on  Form  8-K  dated  December  1,  1999).

     (2)(d)  Agreement  and  Plan  of Merger, dated as of April 28, 2000, by and
          between  Claire's  Stores,  Inc.  and  CSI  Florida  Acquisition, Inc.
          (incorporated  by  reference  to  Appendix  A  to  the Company's Proxy
          Statement  relating  to  the  2000  Annual  Meeting  of Stockholders).

     (3)(a)  Amended  and Restated Articles of Incorporation of Claire's Stores,
          Inc.  (formerly  known as CSI Florida Acquisition, Inc.) (incorporated
          by  reference  to  Exhibit 3.1 to the Company's Current Report on Form
          8-K  dated  June  30,  2000).

     (3)(b)  Bylaws  of  Claire's  Stores,  Inc.  (formerly known as CSI Florida
          Acquisition,  Inc.)  (incorporated  by reference to Exhibit 3.2 to the
          Company's  Current  Report  on  Form  8-K  dated  June  30,  2000).

     (10)(a)  Credit  Agreement, dated as of December 1, 1999, by and among, the
          Company,  the  several  banks  and  other  financial  institutions  or
          entities  from time to time parties thereto, Bear Stearns & Co., Inc.,
          as  sole  lead  arranger and sole book manager, Bear Stearns Corporate
          Lending,  Inc.,  as  syndication  agent, Suntrust Banks South Florida,
          N.A., as documentation agent (incorporated by reference to Exhibit 4.1
          to  the  Company's Current Report on Form 8-K dated December 1, 1999).

     (10)(b)  Form  of  Note  (incorporated  by  reference to Exhibit 4.2 to the
          Company's  Current  Report  on  Form  8-K  dated  December  1,  1999).

     (10)(c)  Form of Guarantee (incorporated by reference to Exhibit 4.3 to the
          Company's  Current  Report  on  Form  8-K  dated  December  1,  1999).

     (10)(d)  Incentive  Stock  Option  Plan  of  the  Company,  as  amended
          (incorporated  by  reference  to Exhibit 10(a) to the Company's Annual
          Report  on  Form  10-K  for  the  fiscal year ended February 1, 1986).

     (10)(e)  Non-Qualified  Stock  Option  Plan  of  the  Company,  as  amended
          (incorporated  by  reference  to Exhibit 10(e) to the Company's Annual
          Report  on  Form  10-K  for  the  fiscal year ended February 1, 1986).

     (10)(f) 1991 Stock Option Plan of the Company (incorporated by reference to
          Appendix  A  to  the  Company's  Proxy  Statement relating to the 1991
          Annual  Meeting  of  Stockholders).

     (10)(g) 1996 Stock Option Plan of the Company (incorporated by reference to
          Appendix  A  to  the  Company's  Proxy  Statement relating to the 1997
          Annual  Meeting  of  Stockholders).


                                       35
<PAGE>


     (10)(h)  401(k)  Profit Sharing Plan, as amended (incorporated by reference
          to  Exhibit  10(e) to the Company's Annual Report on Form 10-K for the
          fiscal  year  ended  February  1,  1992).

     (10)(i)  Office Lease Agreement dated September 8, 1989 between the Company
          and Two Centrum Plaza Associates (incorporated by reference to Exhibit
          10(h)  to the Company's Annual Report on Form 10-K for the fiscal year
          ended  February  2,  1991).

     (10)(j) Amendment of Office Lease Agreement dated July 31, 1990 between the
          Company and Two Centrum Plaza Associates (incorporated by reference to
          exhibit  10  (g)  to  the Company's Annual Report on form 10-K for the
          fiscal  year  ended  January  30,  1999).

     (10)(k)  Addendum  to  Office  Lease  dated  September  8, 1989 between the
          Company and Two Centrum Plaza Associates (incorporated by reference to
          Exhibit  10(j)  to  the  Company's  Annual Report on Form 10-K for the
          fiscal  year  ended  February  2,  1991).

     (10)(l)  Second addendum to office lease dated January 30, 1997 between the
          Company and Two Centrum Plaza Associates (incorporated by reference to
          Exhibit  10(g)  to  the  Company's  Annual Report on Form 10-K for the
          fiscal  year  ended  February  1,  1997).

     (10)(m)  Lease  between  Chancellory  Commons  I  Limited  Partnership  and
          Claire's  Boutiques,  Inc.  dated  August  31,  1990  (incorporated by
          reference to Exhibit 10(i) to the Company's Annual Report on form 10-K
          for  the  fiscal  year  ended  February  1,  1992).

     (10)(n)  Consent  and  Waiver,  dated  as  of  June 13, 2000, to the Credit
          Agreement, dated as of December 1, 1999, by and among the Company, the
          several  banks  and other financial institutions or entities from time
          to  time  parties  thereto,  Bear  Stearns  &  Co., Inc., Bear Stearns
          Corporate  Lending, Inc., SunTrust Banks South Florida, N.A. and Fleet
          National  Bank  (incorporated  by  reference  to  Exhibit  10.1 to the
          Company's Quarterly Report on Form 10-Q for the quarterly period ended
          July  29,  2000).

     (10)(o)  First  Amendment  to  1996  Stock  Option  Plan  of  the  Company
          (incorporated  by  reference  to  Appendix  D  of  the Company's Proxy
          Statement  relating  to  the  2000  Annual  Meeting  of Stockholders).

     (10)(p)  2000  Incentive Compensation Plan for the Chairman of the Board of
          the  Company (incorporated by reference to Appendix E of the Company's
          Proxy  Statement relating to the 2000 Annual Meeting of Stockholders).

     (21) Subsidiaries  of  the  Company.

     (24) Power  of  Attorney  (included  on  signature  page).

Each  management  contract or compensatory plan or arrangement to be filed as an
exhibit to this report pursuant to Item 14(c) is listed in exhibit nos. (10)(d),
(10)(e),  (10)(f),  10(g),  10(h),  (10)(o)  and  (10)(p).


                                       36


                                   SIGNATURES

PURSUANT  TO  THE REQUIREMENTS OF SECTION 13 OF 15(D) OF THE SECURITIES EXCHANGE
ACT  OF  1934,  THE  REGISTRANT  HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS
BEHALF  BY  THE  UNDERSIGNED,  THEREUNTO  DULY  AUTHORIZED.

                                                     CLAIRE'S  STORES,  INC.


                                                     By  /S/RowlandSchaefer
                                                         ------------------
                                                     Rowland  Schaefer
                                                     Chief  Executive  Officer,
                                                     President  and  Chairman
                                                     of  the Board of Directors

April  27,  2001

                                POWER OF ATTORNEY

     We,  the  undersigned,  hereby  constitute  Ira  D.  Kaplan  and  Michael
Rabinovitch,  or either of them, our true and lawful attorneys-in-fact with full
power to sign for us in our name and in the capacity indicated below any and all
amendments  and  supplements to this report, and to file the same, with exhibits
thereto,  and  other  documents in connection therewith, with the Securities and
Exchange  Commission,  hereby  ratifying  and  confirming  all  that  said
attorneys-in-fact  or  their  substitutes, each acting alone, may lawfully do or
cause  to  be  done  by  virtue  hereof.

     Pursuant  to  the requirements of the Securities Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons  on  behalf of the
registrant  and  in  the  capacities  indicated  on  April  13,  2001.


/S/ Rowland Schaefer          Chief Executive Officer, President and Chairman of
-------------------------     the  Board  of  Directors
Rowland Schaefer              (Principal  Executive  Officer)


/S/  Marla  Schaefer          Vice  Chairman  of  the  Board  of  Directors
-------------------------
Marla  Schaefer


/S/  Eileen  B.  Schaefer     Vice  Chairman  of  the  Board  of  Directors
-------------------------
Eileen  B.  Schaefer


/S/  Ira  D.  Kaplan          Senior Vice President, Chief Financial Officer and
-------------------------     Director
Ira  D.  Kaplan               (Principal  Financial  and  Accounting  Officer)


/S/  Irwin  Kellner           Director
-------------------------
Irwin  Kellner


/S/  Bruce  G.  Miller        Director
-------------------------
Bruce  G.  Miller


/S/  Steven  Tishman          Director
-------------------------
Steven  Tishman


                                       37
<PAGE>