June 11, 2008 / 2:55 PM / 10 years ago

UPDATE 1-Claire's bonds fall 5 pts or more after results-KDP

(Adds analyst comment)

NEW YORK, June 11 (Reuters) - Bonds of Claire’s Stores Inc fell five points or more on Wednesday after the specialty retailer reported a drop in sales, according to data from high-yield research firm KDP Investment Advisors.

Claire’s 10.5 percent notes due in 2017 fell to 46 cents on the dollar, down 5.75 cents, while its 9.25 percent notes due in 2015 fell to 62 cents on the dollar, down 6.25 cents, according to KDP.

Claire’s on Tuesday said consolidated same-store sales fell 8.4 percent in the first quarter, while North American same store sales fell 12.3 percent. Adjusted earnings before interest, taxes, depreciation and amortization fell by nearly half to $34.3 million from $60.6 million in the year-ago quarter.

“Same store sales were showing improvement but they’re still negative, so there’s a lot of activity in the bonds today, down of course,” said Christopher Munck, high-yield trader at B. Riley & Co. in Los Angeles.

Retailers overall are getting battered in the high-yield bond market as rising oil prices cut into consumer spending, he added.

“There might be a diamond in the rough somewhere, but I don’t think you need to look for it just yet,” he said. “It’s negative for the retailers and it’s going to continue.” (Reporting by Dena Aubin; Editing by Theodore d‘Afflisio) (dena.aubin@thomsonreuters.com; +1-646-223-6325; Reuters Messaging: dena.aubin.reuters.com@reuters.net))

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