Leading specialty retailer of kids' apparel, The Children's Place Retail Stores Inc, on Thursday posted a wider-than-expected second quarter net loss as falling July sales left large amounts of summer clothing unsold.

The New Jersey-based operator of 600 stores said its net loss was $10.2m compared to $3.9m in the year prior with net sales up 10 per cent to $128.3m from $116.3m during a quarter in which it also opened 46 new outlets.

The chain said same-store sales fell nine per cent in the 13-week period, while for the first half net income plunged to $5m from 8.9m in 2001 and net sales increased nine per cent to $301.3m from $276.8m.

"As previously announced, lower than expected sales in July resulted in excessive levels of summer merchandise which impacted our performance during the second quarter," said Ezra Dabah, chairman and CEO.

"As a result, we took aggressive markdowns to clear the inventory and avoid distracting from our Back-to-School floor set."