The Children's Place coming to the Middle East

Children's Place, one of the largest children's retailers in North America, is set to take its first steps in the Middle East, having signed franchise agreements with two local retailers.

The Children's Place, one of the largest clothing chains in North America, is set to take its first steps in the Middle East having signed franchise agreements with two local retailers.

The brand, which is listed on the Nasdaq in the United States, has teamed up with Apparel Group to open stores in the UAE, Kuwait, Qatar, Bahrain and Oman and will work with Fawaz Alhokair in Saudi Arabia. Both agreements with local retailers are to run The Children's Place stores for the next 10 years.

"While the opportunity in apparel as a whole is considerable, the potential rewards are even greater within childrenswear," said Magdalena Kondej, the global head of apparel research at Euromonitor International, a market research company.

Ms Kondej said Saudi Arabia remained the biggest untapped market and forecast growth at a rate of 7 per cent each year until 2016 for children's clothing in the kingdom.

"At a time when the US in comparison is predicted [to have] 1 per cent average annual value growth to 2016 in both apparel and childrenswear, it is easy to see why The Children's Place has been tempted to try its hand in the region."

The Children's Place has more than 1,000 stores across North America and the company designs and sells fashionable kids' clothing at value prices.

The first The Children's Place outlets are expected to open in Dubai and Saudi Arabia in September, followed by a roll-out across the region.

Children's clothing is big business for local retailers as parents are increasingly spending more on their fashion-conscious offspring.

Parents spent an estimated $1 billion (Dh3.67bn) on children's designer clothing and footwear last year in the Emirates, according to Euromonitor.

Analysts say The Children's Place will pose a serious threat to Mothercare and Baby Shop, which both work in the mass-market children's arena and have stores across the Middle East.

"Given its position as market leader, the retailer with the most to lose from The Children's Place targeting the Middle East is Mothercare," said Ms Kondej, adding Mothercare had an 8 per cent share of the UAE children's market.

"Because of the more developed retail environment in the United Arab Emirates, the brand faces a much higher level of competition there, with Baby Shop and Pumpkin Patch both holding a bigger slice of the market."

Mothercare, which is operated by MH Alshaya, has 290 stores across the Middle East, while Baby Shop, which is owned by the Landmark Group, operates 161 shops.

In total, Apparel Group has 655 stores, employing 5,500 staff, across its brands including Tim Hortons, Aldo, Dune, Nine West and Tommy Hilfiger.

Fawaz Alhokair Group, based in Riyadh, operates more than 1,000 outlets across the Middle East with branded stores such as Zara, Gap, Marks & Spencer and Promod.

The Children's Place shares have fallen 2.45 per cent so far this year on the Nasdaq in New York. It announced its expansion plans late last month to investors.

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