Aeropostale launch's children's concept

Children's retailer Aeropostale Inc. said Thursday it opened its first P.S. from Aeropostale children's store.

The company, which announced the concept in March, plans to open about 9 additional stores in 2009 plus an online location at http://www.ps4u.com. The concept targets girls and boys ages 7 to 12.

Aeropostale Inc. has been among the best performing retailers amid the recession, as teens snap up its value-priced jeans and tee-shirts. In May, it posted a double-digit increase in sales in stores open at least one year, while many retailers reported sales declines. Still, many analysts were skeptical when Aeropostale first announced the new concept. Other retailers have been closing secondary concepts: Abercrombie & Fitch Co. shuttered its Reuhl concept earlier this week, and Saks Inc. closed its Libby Lu chain for girls.

But analysts seemed more positive after taking a look at the store, at the Palisades Mall in West Nyack, N.Y.

"We came away from the P.S. launch excited and encouraged by its potential," wrote BMO Capital Markets analyst John Morris in a note to investors. He rates Aeropostale "Outperform."

He said the product looks "on-trend, focused, cohesive, differentiated enough from Aeropostale for the elementary kid, and in line with Aero's core competency in value and brand identity."

The pricing strategy is similar to Aeropostale, with planned promotional pricing every day.

Thomas Weisel analyst Liz Dunn, who rates Aeropostale "Market Weight" also said she was impressed by the launch and believes "it will extend Aeropostale's growth and allow for nice leverage of their core competencies."