Specialty teen apparel and costume jewellery retailer Claire's Stores Inc on Thursday posted a 49 per cent slump in fourth quarter net income to $15.4 million.

Those results include a loss of about $14m, or 30 cents a share, related to the discontinued operations of the Mr Rags apparel chain.

Claire's Stores said in a statement that fourth quarter sales fell 5.2 per cent to $280.4m from $296m and same-store sales fell two per cent.

For the full year, it posted net income of $19.6m, or 40 cents a share, down 69.9 per cent from $65m, or $1.30 a share, in the year before. Full-year sales fell three per cent to $918.7m from $946.7m, while same-store sales were down two per cent.

It also forecast a challenging spring selling season due to tough economic conditions and expects same-store sales growth for fiscal 2003 to be flat to up one per cent.

Same-store sales for the first quarter are projected to be down by around four per cent and it expects to increase the number of stores it operates by 16.