Children's apparel maker OshKosh B'Gosh said it would axe 50 jobs following the cancellation of a major clothing order.

The order, bound for Toys 'R' Us, stiffed after the toy giant announced plans to close its 146 Kids 'R' Us apparel stores.

According to OshKosh CEO Douglas Hyde, the job cuts will include 14 staff at the company's headquarters.

"Unfortunately, the staff reductions announced today are necessary to remain competitive and position us for a strong future," he said.

"We remain on schedule with our key strategic initiatives (which include) our Genuine Kids from OshKosh license arrangement with Target stores and our family lifestyle store concept.

"With a successful execution of these initiatives, along with stabilisation of our core wholesale and outlet retail business, we are optimistic that we can return the company to higher levels of profitability."

Wisconsion-based OshKosh, which expects to incur a $3.5 million pre-tax inventory charge in the fourth quarter as a result of the order cancellation, said it would continue to sell to infant's clothing chain Babies 'R' Us.