Michigan-based Children's Resale Chain ‘caches' In Big

At 100 Stores and Growing, Children's Orchard Sees Record Sales with Customer Loyalty Program

(Tuesday, February 21, 2006) - In the battle to change the face of resale shopping, Children's Orchard, a growing chain of nearly 100 children's retail stores is emerging a winner – signing a record number of franchise deals and ringing up National Promotion sales that topped 70 percent compared to the previous year. Company executives attribute the sales spike to the introduction of its "Cache Card", a customer loyalty program that rewards shoppers with in-store credit. They say the program is "breathing new life" into the 25-year-old franchise.

After rolling out its new Cache Card last year, Children's Orchard's sales skyrocketed, sales during its January 2005 Big Brand event increased by nearly 90 percent compared to the previous year. During the promotional period, customers received a $10 Cache Card for every $35 they spent. In addition, after introducing the Cache Card, the franchise experienced same-store sales growth of 8 percent compared to 2004, with the most active Cache Card stores far exceeding that level. The Cache Card, which looks like a gift card, is used as an incentive to induce customers to accept in-store credit in lieu of cash for items they sell to the store. Seller bonuses for accepting in-store credit range from 25% to 50%.

"The Cache Card has had a tremendous impact on sales," said Children's Orchard President and CEO, Taylor Bond. "Beyond our National Promotions where sales skyrocketed compared to the previous year, the Cache Card has proved to be a successful vehicle for driving average ticket and repeat business. By rewarding our loyal customers with in-store credit, they reward us back by returning over and over. It's a win-win for the customer and our franchise owners."

Judging by an increase in the number of franchise deals signed, word of the program's results must be getting around. Last year, the self-described "upscale-resale" boutique franchise, which offers gently used and new name-brand children's clothing, toys, furniture and accessories, opened 10 new locations. Bond conservatively projects to open an additional 15 locations in 2006.

"2005 was an incredible year for Children's Orchard, both in terms of big increases in consumer sales and franchise sales," said Bond, a veteran of both the retail and franchise industries. "We are slowly but surely reaching our goal of changing the way consumers think about resale, and our programs are working."

About Children's Orchard

Founded in 1980, Children's Orchard is the nation's first franchise of gently used and new name-brand kids stuff. With nearly 100 franchise locations in 23 states, each Children's Orchard location buys and sells quality used and new children's brand name clothing, toys and accessories in an upscale retail environment. Children's Orchard stores are designed to emphasize quality, value, comfort and commitment to the local community. For more information, please visit the website at www.childorch.com or call (800) 999-KIDS.

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