If The Children's Place had a grandma, she'd proclaim, "My, how fast you've grown!" The rapidly growing chain is the largest pure-play children's specialty apparel retail in North America (ahead of Gymboree). It operates about 965 Children's Place stores, primarily in malls and outlet centers throughout the US and about 130 stores in Canada. It also sells apparel online. The Children's Place outfits children from newborn to 12 years old in its own brand of value-priced apparel, shoes, and accessories, most of which is produced by manufacturers in China (38%), followed by Bangladesh, Cambodia, and Vietnam. The Children's Place was founded in 1988.
Since entering Canada in 2003, The Children's Place has grown to number about 130 stores there. Canada accounts for nearly 15% of the retailer's total sales, or about $252 million.
In addition to retail stores in the US and Canada, the company operates an online business that contributes about 12% of its total sales.
Sales & Marketing
The children's retailer spent approximately $37.1 million on advertising in fiscal 2013 (ended January), down from the $37.4 million in fiscal 2012. The company targets its best customers with direct mail to build its brand and loyalty.
While the retailer's store count is growing quickly, the sales and profit picture is mixed. Sales at The Children's Place stores increased 5% in fiscal 2013 (ends January) versus the prior year, while net income declined for the third year in a row. The sales gain (double that of the previous annual comparison) was driven by the addition of new stores, and a same-store sales gain of 2%. Canada outperformed the US with sales up 11% and 5%, respectively. E-commerce accounted for about 12% of sales in fiscal 2013, or about $215 million. Net income suffered from costs associated with the closing of two distributions centers.
Under the leadership of CEO Jane Elfers, who joined The Children's Place in 2010, the company has accelerated the pace of new store openings, which had slowed as the economy foundered and the company was distracted by a proxy battle with its former chairman and the disposal of its Disney Stores business. Indeed, The Children's Place added more than 60 stores in the US and Canada in fiscal 2013. Another 55 new locations are planned for fiscal 2014. The company is continuing to invest in its fast-growing its online business (up more than 140% over the past three years), and is sharpening its marketing message. The company's new tagline -- "Big Fashion, Little Prices" -- stresses its value-priced, high-quality, high-fashion offering.
Adage Capital Partners owns about 10% of the company's shares.
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