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More than ever, penny-pinching parents are picking up kids clothes at discount stores and mass merchants. That leaves pricier children's specialty apparel retailers to battle for a shrinking customer base. Specialty stores accounted for only 7 percent of the childrenswear market last year, the same as in 2001. With a slew of new competitors such as Abercrombie, growing upscale children's specialty chain Hanna Anderson and Talbots Kids, will the sector's current leaders be able to maintain their position in the playground pecking order? Take a look at the stats.

Gymboree has long been a hit with girls, but the Burlingame, Calif.-based retailer is attempting to drive growth by tinkering with its boys apparel line, says Merrill Lynch analyst Mark Friedman. Plans for 2003 include an additional 15 to 20 Gymboree stores and 10 to 15 Janie & Jack test stores, a new high-end baby and infant clothes and gift subchain that targets wealthy grandparents. New Gymborees are expected to average 2,200 square feet and Janie & Jack 1,300 to 1,400 square feet. The company plans to cap Gymboree growth at 590 stores in the U.S. It has 524 today. “Considering the fierce competition, Gymboree's ability to regain normalized margins may be a challenge,” says Sanders Morris Harris analyst Elizabeth Pierce. “Gymboree must remain fashion-right in order to sustain its market position and recapture market share lost to its competitors.”

Total Stores 2002: 524 (+1%)
Average store size: 1,779 sq. ft.
Comparable Store Sales Growth 2002: (+4%)
Total Sales 2002: $535 million (+6%)
Sales Per Square Foot 2002: $520

After a quick expansion last year, The Children's Place went too fashion-forward with designs that appealed to urban customers, but alienated heartland parents. Also, an over-assorted product line and lean inventories made the stores difficult to shop, says CIBC World Markets analyst Dorothy Lakner. Now new merchandising executives at the chain are reducing the number of styles by 30 percent from last year. New store growth in 2003 will slow to 50 stores. All new stores will reflect a new prototype with entrances located in the center of a larger, wider store, compared to the chain's current long and narrow footprint. The Prognosis: “Children's Place's quest to move to an ‘everyday low price’ stance from its position as a promotion-based retailer may be hard to communicate to shoppers,” Lakner says.

Total Stores 2002: 643 (+28%)
Average store size: 4,421 sq. ft.
Comparable Store Sales Growth 2002: (-16%)
Total Sales 2002: $671.4 million (+2.2%)
Sales Per Square Foot 2002: $265

Columbus, Ohio-based Too Inc., operator of Limited Too stores, is known as the gold standard of tween retailing among Wall Street analysts. The chain was on a roll in 2002. But fashion misses and delivery issues struck during the holidays, driving comps down 12 percent in the fourth quarter, says Merrill Lynch analyst Mark Friedman. Core consumers also became more value-oriented and migrated to cheaper venues. Too Inc. plans to shift product assortments while staying close to its customers through increased direct marketing. 2003 plans include 50 to 55 stores in the “girl power” format, which emphasises sportswear (60 percent of the merchandise). The Prognosis: “Limited Too remains one of those concepts where you can point a finger and say, ‘If the product is good it will sell and it will sell at full price,’” says Friedman.

Total Stores 2002: 522 (+11%)
Average store size: 4,054 sq. ft.
Comparable Store Sales Growth 2002: (+3%)
Total Sales 2002: $647.5 million (+7.4%)
Sales Per Square Foot 2002: $325

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