I have 2 ds's, so we don't really have the "sexy kid" issue with clothing, but I do have friends with girls so I witness their struggle when I shop with them.
For my kids, though, I love Kohl's (great clearance sales!), Old Navy (again, clearance!), Gap (you guessed it, clearance rack!), Gymboree (for the little one, and only sometimes I get lucky!) And EBAY!! I've purchased some great lots on ebay for a little bit of money. Some of the pieces had to go to goodwill, but the salvageable stuff was worth what I paid! I also shop Target quite a bit...I think of all the discount dept. stores, their clothing is the best made and the most in style. Can't forget the Children's Place...I just cleaned up there during the spring sale!! Tons of stuff for little $$!!Twice a year, we hit the outlets in Reading and Tannersville PA for Gap, Healthtex, Carters, and Nike.
I never ever buy anything full price *unless it is like a 3.99 knit shirt or shorts*.