China's Shrinking Manufacturing Sector

How will clothing manufacturers be impacted from the changes in China's manufacturing industry? Those and other notable trends from The Children’s Place Inc.'s Q308 conference call:

China:

Unfavorably... we have less supply, as many of the factories, particularly those in southern China, have closed or suspended their operations; we have some higher labor costs in China due to new labor laws; we have some higher costs of environmental initiatives and higher cost of capital financing for some of these factories.

Cutting back on branding initiatives:

We have decided to exit the Disney (DIS) Store North American business and focus all of our efforts on The Children’s Place brand. In this economy, we’re pleased to be focusing exclusively on the value price driven to apparel market.

Investing in e-Commerce:

The only area that we are investing a little bit more aggressively in is eCommerce because we do see some upside growth from an eCommerce perspective.

Another blow to print advertising:

A lot of our marketing is in direct mail and that’s the area we can measure very effectively. Most of the magazine is not as measurable as the direct mail. I think in this environment, we’ve tended to put more of our emphasis on the direct mail, where we’re getting good returns and on the margins, slightly deemphasized some of the magazines.