SECAUCUS, N.J.--(BUSINESS WIRE)--Aug. 16, 2001--The Children's Place Retail Stores, Inc. (Nasdaq:PLCE) today reported results for the second quarter ended August 4, 2001.

Second Quarter

• Net sales for the quarter increased 8% to $116.3 million, compared with $107.8 million for the same period in 2000.

• Excluding sales of the Company's Yaak folding scooter, second quarter sales increased 10% over the prior year period.

• Comparable store sales decreased 16% for the quarter, versus a 7% increase for the same period last year.

• Excluding sales of the Company's Yaak folding scooter, second quarter comparable store sales decreased 14% from the prior year period.

• Net loss was $3.9 million versus net income of $1.5 million last year.

• Diluted loss per share was $0.14 compared with earnings per share of $0.06 in the 2000 period.

• The Company opened 44 new stores during the second quarter.

Six-Month Period

• Net sales for the six-month period increased 16% to $276.8 million from $237.9 million for the same period in 2000.

• Comparable store sales decreased 8% for the period compared with a 6% increase for the same period last year.

• Net earnings were $8.9 million compared with $10.9 million a year earlier.

• Diluted earnings per share were $0.33 compared with $0.41 in the 2000 period.

• The Company opened 81 new stores during the six-month period.

"Second quarter results were primarily impacted by a slowdown in store traffic, due to the difficult economic climate. However, we are well positioned with fresh and fashionable product for the important back-to-school season. We have increased the proportion of fashion to basic merchandise with a favorable customer response," commented Ezra Dabah, Chairman and Chief Executive Officer.

"Our aggressive and profitable growth strategy continues on-track with 87 new stores opened year-to-date, well on the way to opening our planned 120 stores this year. Sales in our new stores continue to perform exceptionally well, exceeding our expectations. The superior economics of these stores, coupled with the broad consumer appeal of our brand, are the key factors in our successful expansion strategy," concluded Mr. Dabah.

The Children's Place will host a webcast of its second quarter results conference call today at 10:00a.m., Eastern Time. Investors and the media are invited to listen to the call at the Company's web site, www.childrensplace.com. An archive of the webcast will be available on the same site.

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 4, 2001, the Company operated 481 stores in 46 states. The Company also sells its merchandise through its virtual store located at www.childrensplace.com.

This press release contains certain forward-looking statements regarding future circumstances. These forward-looking statements are based upon the Company's current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements including, in particular, the risks and uncertainties described in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof.

               THE CHILDREN'S PLACE RETAIL STORES, INC.
                    CONDENSED STATEMENTS OF INCOME
               (In thousands, except per share amounts)
                              (Unaudited)


                                 13 Weeks Ended:     26 Weeks Ended:
                                 --------------      --------------
                               August 4,  July 29,  August 4, July 29,
                               --------   -------   --------  --------
                                 2001      2000       2001      2000
                                 ----      ----       ----      ----

Net sales                       $116,318  $107,764  $276,779  $237,944
Cost of sales                     75,499    67,313   167,804   140,744
                                --------  --------  --------  --------

Gross profit                      40,819    40,451   108,975    97,200
Selling, general and
 administrative expenses          38,959    30,874    77,917    64,942
Pre-opening costs                  1,654     1,586     3,942     4,269
Depreciation and amortization      6,473     5,053    12,342     9,524
                                --------  --------  --------  --------

Operating income (loss)           (6,267)    2,938    14,774    18,466
Interest expense, net                  5       277        35       458
Other expense, net                   107       124       107       127
                                --------  --------  --------  --------

Income (loss) before 
 income taxes                     (6,379)    2,537    14,632    17,881
Provision (benefit) 
 for income taxes                 (2,487)    1,021     5,706     6,991
                                --------  --------  --------  --------

Net income (loss)               $ (3,892) $  1,516  $  8,926  $ 10,890
                                ========  ========  ========  ========

Diluted earnings (loss) 
 per share                      $  (0.14) $   0.06  $   0.33  $   0.41

Diluted weighted average number
 of shares outstanding            27,000    26,662    26,922    26,511



               THE CHILDREN'S PLACE RETAIL STORES, INC.
                       CONDENSED BALANCE SHEETS
                            (In thousands)
                              (Unaudited)


                                                August 4,     July 29,
                                                  2001          2000
                                               --------       --------
Current assets:

Cash and cash equivalents                      $  9,922       $  4,769
Accounts receivable                              16,790         14,368
Inventories                                      68,600         62,914
Other current assets                             23,321         16,493
                                               --------       --------

Total current assets                            118,633         98,544

Property and equipment, net                     131,377        110,264
Other assets, net                                14,183          9,973
                                               --------       --------

Total assets                                   $264,193       $218,781
                                               ========       ========

Current liabilities:

Revolving credit facility                      $ 25,177       $ 28,968
Accounts payable                                 24,675         27,272
Accrued expenses and other current liabilities   29,328         25,032
                                               --------       --------

Total current liabilities                        79,180         81,272

Other liabilities                                 7,929          5,506
                                               --------       --------

Total liabilities                                87,109         86,778

Stockholders' equity                            177,084        132,003
                                               --------       --------

Total liabilities and stockholders' equity     $264,193       $218,781
                                               ========       ========