Channel Checks in Children’s Retailing Space While Going in Holiday Season (PLCE, GPS, GYMB)

Mark Benson of Wedbush Morgan believes that the children’s space is highly promotional as consumers always look out for apparel, irrespective of the economic environment, as kids tend to outgrow their size. According to Wedbush Morgan, it is extremely tough to manage inventories in order to accommodate numerous promotions. Wedbush Morgan analyzes the following retailers in the kids' space.

Children’s Place (NASDAQ: PLCE) continues to improve upon its product offerings. Wedbush Morgan believes that going into the Holiday season, PLCE stores are well positioned with inventory sufficient enough to meet the highly promotional environment. Although sales in November seem to be dull, Children’s Place has significantly boosted traffic levels relative to that in the malls, Wedbush Morgan says.

With the introduction of the Stella McCartney for Gap Kids line, Gap Kids (NYSE: GPS) stores have become more fashionable. While the sales of GPS' cheaper items seem to be high, higher ticket items, such as the $128 worth boy’s military jacket, are waiting for customers, Wedbush Morgan adds. The Gap Give and Get Friends and Family promotion and a discount of an additional 30% on all purchases have attracted customers to Gap Kids stores, Wedbush Morgan mentions.

According to Wedbush Morgan, recent checks have indicated that Gymboree (NASDAQ: GYMB) is witnessing robust traffic and conversion at all of its stores. Despite being frequented by children for trendy products, checks indicate that traffic levels at GYMB stores rise significantly during promotional activity. Gymboree has indicated that inventories at its stores will continue to build through the holiday, Wedbush Morgan said.