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 975 Children's Place stores, primarily in malls and outlet centers throughout the US, Puerto Rico, and about 130 stores in Canada. It has more than 50 international stores operated by franchise partners. 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.
Overall, The Children's Place has more than 1,100 stores. Major markets include New York, California, and Texas.
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 $238 million.
The company has warehouse distribution centers in the US (Alabama) and Canada (Ontario), as well as product support locations in China, Bangladesh, and India.
Sales and Marketing
The company uses about 100 independent garment manufacturers in Greater Asia. China represented about 36% of total goods purchased, followed by Bangladesh (24%), Vietnam (11%), and Cambodia (8%).
The children's retailer spent approximately $33.8 million on advertising in fiscal 2014 (ended January), down from the $37.1 million in fiscal 2013. 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. In 2013 revenues fell as a result of lower overall sales and average transaction size. Sales fell that year 2% to $1.8 billion. Net income declined for the fourth year in a row, falling 16% to $53 million as a result of lower revenues as well as an increase in expenses ranging from store renovations to interest charges.
Cash flow from operations also decreased by $31.6 million to $173.5 million, primarily due to an increase in inventory holdings and lower profits.
The company has accelerated the pace of new store openings, which had slowed as the economy foundered. The company has also been shuffling its portfolio of stores, shuttering approximately 100 less-desirable locations while opening new locations to improve profitability. Including some 40 stores closed in 2013 and another 30 in 2014, the company plans to close 125 locations through 2016. Additionally, the company has been expanding its international presence of franchised stores, particularly in the Middle East (where there are 35 locations); a key market there is Israel. The Children's Place has also partnered with Grupo David to expand into Latin America and the Caribbean, with an expected 35 to 40 stores planned over the next few years.
The Children's Place's merchandising strategy is to offer a compelling mixture of clothing, shoes, and accessories that are fun and easy to put together. The company is continuing to invest in its fast-growing its online business and is sharpening its marketing message. Its tagline -- "Big Fashion, Little Prices" -- stresses its value-priced, high-quality, high-fashion offering.
The Children's Place was founded in 1988.