Children’s Clothing Remains Strong

Even in a down economy, parents are buying.

Children’s clothing retailers are posting strong earnings in the first quarter of 2009. Children’s Place (PLCE) reported a 21% increase in profits. The clothing retailer reported $23.5 million in first quarter earnings, up from $19.5 million in 2008. Sales reached $401.9 million while same store sales increased 1% over the same period.

In the US it appears parents are scaling back on higher end apparel as Gymboree (GYMB), the more expensive counterpart to Children’s Place, reported a 13% decline in profits and 5% decline in sales. Even with the decline, Gymboree exceeded expectation generating a $21.8 million profit.

Around the world, high-end children’s clothing is booming.

A report out of Australia showed parents spent an average of $5,394 a year on food and children’s goods in the first four years. Clothes and diapers account for the highest percentage of those costs.

High-end retailers, including GAP, Burberry, and DKNY are seeing strong performance worldwide. An increase in maternal age has resulted in moms with higher incomes to take over the children’s buying industry which has allowed retailers to curb some of the negative affects from the economy. While moms buying these high-end goods are split between quality and status, buying clothing for their children is a highly emotional purchase. Many of today’s parents are willing to go without themselves to afford only the best for their children, which is good news for the children’s industry.

Sources for this article found at:

http://www.thestreet.com/story/10504122/1/childrens-place-grabs-profit-b…

http://www.news.com.au/heraldsun/story/0,21985,25519136-2862,00.html