The Children’s Place plans to close 200 stores in 2020 and another 100 stores in 2021, the retailer revealed in announcing its Q1 2020 results. The children’s specialty apparel retailer currently operates 920 stores as well as an e-Commerce business representing 31% of its revenue.
“This initiative will greatly reduce our reliance on our brick-and-mortar channel and we are targeting our mall-based, brick-and-mortar portfolio to represent less than 25% of our revenue entering fiscal 2022,” said Jane Elfers, The Children’s Place President and CEO in a statement.
“Although we are facing a period of uncertainty regarding the future impact of the COVID-19 pandemic, The Children’s Place is moving swiftly and decisively to proactively address these challenges,” Elfers said. “In an effort to structurally position the company for continued success, we are significantly accelerating our fleet optimization initiative and focusing our resources on accelerating our digital sales, both key elements of our long-standing transformation strategy.”
Since it announced the fleet optimization initiative in 2013, the retailer has closed 275 stores. Even though approximately 95% of the company’s U.S. and Canada stores have been closed since March 18, the company enabled ship-from-store capabilities in approximately 85% of its U.S. stores in late April, more than doubling its daily shipping capacity. Overall net sales decreased 38.1% in Q1 compared to the same period in 2019.
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However, due to online sales growth of 300% in the first five weeks of Q2, Elfers said The Children’s Place was able to achieve a low-double-digit percent increase in consolidated sales during this period..
The Children’s Place began a phased store reopening program on May 19. As of June 8, 2020, 61 stores were open to the public. “We are planning to have the majority of our stores open by July,” Elfers noted.
As of April 1, Elfers agreed to forgo 100% of her salary, the senior leadership team took a temporary 25% salary reduction and members of the independent Board of Directors gave up their cash compensation until further notice. On April 5, the company instituted a combination of temporary furloughs and pay reductions for the majority of its corporate staff, and U.S. and Canadian field management and stores associates were temporarily furloughed until they could safely return to their positions.
