Retailers shift their ad spending from TV, radio and print ads to digital ads.
Total and comparable sales also grew, but not as much.
The Children's Place Retail Stores Inc. booked sales growth in the second quarter, led by the Internet.
For the quarter ended July 28, specialty apparel retailer The Children’s Place, No. 111 in the Internet Retailer Top 500 reported:
- E-commerce accounted for 10.5% of total sales compared with 9.1% in the second quarter of 2011. Based on those percentages, web sales totaled about $37.9 million, an increase of 21.1% from online sales of about $31.3 million in Q2 2011.
- Total sales increased 5.0% to $360.8 million from $343.5 million.
- Comparable-retail sales, including stores, e-commerce and non-store revenue, increased 3.4%.
- Net loss of $18.0 million compared with a net loss of $9.8 million in Q2 2011.
“Despite the continued difficult economic environment, we believe lower apparel costs in the back half coupled with strengthening conversion, transactions and average transaction value, will result in positive comp sales and operating margin expansion in fiscal 2012,” says Jane Elfers, president and CEO.
For the first six months:
- E-commerce accounted for 10.9% of total sales compared with 9.4% in the first half of 2011. Based on those percentages, e-commerce sales totaled about $87.1 million, an increase of 20.0% from web sales of about $72.8 million in the prior year.
- Total sales increased year over year about 3.2% to $799.3 million from $774.3 million.
- Comparable-retail sales increased 1.1%.
- Net income decreased 71.0% to $5.6 million from $19.3 million.
The Children’s Place plans to consolidate into a single U.S. distribution center in Fort Payne, AL, in order to more effectively manage its inventory and optimize capacity, the retailer says. The Fort Payne facility is the company's newest and largest. Its Northeast distribution center in Dayton, NJ, will close Dec. 31.
Closing that distribution center is expected to save more than $4 million annually, the company says. The distribution center changes are expected to result in charges of approximately $5 million in the third quarter and $11 million in the fourth quarter of 2012.