The Children’s Place Expands Into China

The Children’s Place is the latest fashion retailer to look to the Far East for new growth opportunities.

The Secaucus, N.J.-based firm, which operates 1,014 stores in the U.S., Canada and Puerto Rico, announced today that it has signed an exclusive licensing agreement with Zhejiang Semir Garment Co. Ltd. (Semir), parent of Balabala, China’s largest specialty kids’ apparel retailer. The partnership will take The Children’s Place brand into the Greater China market, encompassing Mainland China, Taiwan, Hong Kong and Macau.

Over the first five years, Semir will open at least 300 Children’s Place retail locations — stocking a mix of apparel, footwear and accessories — in Greater China, as well as operate the brand’s e-commerce business. The partnership is projected to generate between $125 million and $150 million in sales by 2022.

“Entering China through this strategic partnership is a game-changer for our international business. It takes us one step closer to our goal of becoming the leading global omnichannel kids’ apparel brand,” said president and CEO Jane Elfers. “The young children’s apparel market is already one of the fastest-growing categories in China.”

Indeed, the category is estimated at $24 million, and with China’s recent shift to a two-child policy for families, it is forecast to double by 2025.

Elfers cited Semir’s dominance within China’s children’s market and its strong retail, digital and operational expertise. Through its Balabala brand, Semir operates and franchises approximately 4,400 children’s apparel stores and runs the largest such e-commerce business in China through third-party platforms such as Tmall, JD and VIP.com. Semir boasts annual revenues of $1.9 billion.

“This partnership provides an entrée for The Children’s Place into the China market that would not otherwise be possible with any other partner,” Elfers said. “[Semir] provides The Children’s Place with instant access to prime retail locations, established relationships with a large number of franchisees, and significant local sourcing and logistics capabilities.”

The Children’s Place is one of a growing number of U.S. retailers eyeing China, which is in the midst of a consumer revolution, fueled by an exploding middle class and aggressive moves by Chinese e-commerce giant Alibaba Group to shape China into a consumption-based economy. Joint research by Alibaba’s AliResearch think tank and Boston Consulting Group predicts that the Chinese consumer economy will swell to $6.1 trillion by 2021.