West Caldwell, New Jersey - August 18, 1998 - The Children's Place Retail Stores, Inc. (Nasdaq:PLCE) today reported sales and earnings for the second quarter ended August 1, 1998.

First Quarter:
Net sales increased 43% to $48.0 million, compared with $33.5 million in 1997. Comparable store sales increased 8% compared with a 1% decrease last year.
Net loss decreased to $0.5 million, compared to the prior year's loss of $1.7 million.
Diluted loss per share improved to $.02 from a $.07 per share loss last year.
11 new stores opened during the second quarter.

First Half:

Net sales increased 43% to $104.0 million compared with $72.7 million in 1997. Comparable store sales grew 7% compared with 2% growth in the prior-year period.
Net earnings increased to $2.2 million from a loss of $0.7 million in 1997.
Diluted earnings per share increased to $.09 from a $.03 per share loss last year.
34 new stores opened during the first half of 1998.

"Increased sales volume and improved gross margin in the first half of 1998 are evidence of the customer's acceptance of our merchandising initiatives and confirm a successful execution of our operating strategies," said Ezra Dabah, Chairman and Chief Executive Officer. "We entered the back-to-school season with very low levels of summer inventory and are well positioned for this very important season. In addition, we are pleased to report that the 81 new stores opened in the past 18 months have exceeded our sales plan for the first half of 1998."

The Children's Place Retail Stores, Inc. is a leading specialty retailer of high quality, value-priced apparel and accessories for children, newborn to age twelve. The Company designs, contracts to manufacture and sells its products under the "The Children's Place" brand name. As of August 1, 1998, the Company operated 189 stores located primarily in regional shopping malls in the eastern half of the United States.