Mar. 20--SECAUCUS -- Shares of the Children's Place Retail Stores Inc. fell nearly 6 percent on Thursday after the company reported a profit in its fiscal fourth quarter as the company shifted sales strategy and gained market share.

The company also said it expects to spend $17 million in capital improvements related to the relocation of its headquarters.

The children's clothing retailer said it had net income of $38.8 million, or $1.31 a share, on sales of $441.5 million for the fiscal fourth quarter that ended Jan. 31. That compares with a loss of $58.5 million, or $2.01 a share, on slightly higher sales, of $443.3 million, in the same quarter in 2007.

Sales at stores open at least a year dropped 5 percent in the fourth quarter of 2008. The company attributed the decline to an 11-cent-per-share negative impact from the Canadian dollar and a 4 percent drop in transactions as mall traffic fell.

"Three shifts in shopping patterns appear to be happening in the market," said Chuck Crovitz, the retailer's interim chief executive officer, in a conference call. "Consumers are going to malls less frequently. They're making a greater proportion of their purchases on sale merchandise rather than full price and they're delaying purchases and buying much closer to need. We expect that all three factors will continue to impact the overall growth of the children's apparel market during 2009."

To address shifting shopping patterns, Crovitz said the company shifted to a "wear-now" strategy and kept winter merchandise in stores during January and February. "We expected that mom shopping closer to need will be looking for warm replacement clothes if the cold weather persisted, and it did."

Children's Place said market share increased to 3.9 percent from 3.6 percent in 2008. Selling, general and administrative expenses fell almost 9 percent, while asset impairment charge dropped 64 percent.

The company recently announced a decision to move its e-commerce division from Secaucus to Fort Payne, Ala., in June, eliminating 350 jobs in Secaucus. The move is expected to result in annual pretax savings of $1.8 million.

The clothing retailer, which plans to open 30 new stores this year, said it expects to save $20 million annually through the cost-control measures implemented in the first quarter of 2009.

Children's Place operated 917 stores as of the end of fiscal 2008.

The company also said it expects to spend about $17 million in capital improvements related to the relocation of its headquarters in the fall to 125,000 square feet at 500 Plaza Drive, also in Secaucus. The move will consolidate workers who are now scattered in four locations in Secaucus.

It also plans to pay $6.4 million to its current landlord, to be released from leases at 915 Secaucus Ave., its current headquarters, and 2 Emerson Plaza, which it had leased but never occupied.

Children's Place formerly owned more than 300 Disney stores, but it returned that money-losing operation to the Walt Disney Co. last May.

Children's Place shares fell $1.38, or 5.9 percent, to $22.13 as of 3:59 p.m. in Nasdaq Stock Market trading.

E-mail: lynn@northjersey.com

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