RETAIL—Children’s Retailer Begins Aggressive Push Into L.A.

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Despite soft consumer demand and first-quarter earnings shortfalls by national retailers, an East Coast children’s clothing chain is plunging headlong into Los Angeles.

The Children’s Place Retail Stores Inc., an 11-year-old chain that sells apparel for infants to 12 year olds, has opened two stores in L.A. in the last two months, one at the Fox Hills Mall in Culver City and another at the Del Amo Fashion Center in Torrance.

Next week it plans to open a store at the Northridge Fashion Center, and another is planned for the South Bay Galleria in Redondo Beach.

The chain’s target market price-conscious parents who don’t necessarily want to shop at discount stores.

The Secaucus, N.J.-based company, with 450 stores nationwide generating $587 million in annual sales, already has 25 stores in the state. By yearend, it plans to have opened 10 more The Children’s Place stores in Southern California and another 20 elsewhere in the state.

It has leased a 250,000-square-foot distribution center in Ontario, which began operations in early May.

Despite the shaky retail environment, company executives at The Children’s Place seem upbeat about the future.

“We think we are somewhat insulated from recessionary times due to the fact that children grow out of their clothes and that our merchandise is value priced,” said Mario Ciampi, senior vice president of store development and logistics for The Children’s Place.

Officials said California is a good place for the chain’s expansion because the state has a large population of children from diverse cultures, and a higher-than-average birth rate.

“The ethnic diversity in California suits our business,” Ciampi said. “We found that, not only does California have the largest population base, but the state has a far greater number of children age 12 and under. Over 13 percent of that age group in the country lives in California alone.”

The Children’s Place is also capitalizing on the changing demographics that have been influencing retailers across the country. Baby boomers are outfitting their kids before they outfit themselves, as the economy softens.

Also, the tightening economy is causing consumers to become more cost conscious.

Several retailers have been reporting disappointing results in recent months. Federated Department Stores Inc., owner of Macy’s and Bloomingdale’s, reported that same-store sales in April were up only 0.8 percent from the same period last year. Meanwhile, May Department Stores, parent of Robinsons-May, saw same-store sales drop 8.3 percent in April.

The Children’s Place, by contrast, has been a financial success story. Its same-store sales in April were up 10 percent. Last year, net income totaled $42.7 million, up 22 percent over the year before.

The stores that seem to survive best during economic downturns are the discounters and mid-market retailers, such as Kohl’s Corp., which also is making a major foray into Southern California. In April, its same-store sales were up 12.7 percent over the year-earlier month.

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