The Children’s Place to Reduce Store Footprint by One-Third
The Children’s Place plans to reduce its store footprint by one-third by the end of fiscal year 2021 as part of an ongoing effort to shift its core business online. Three hundred of the company’s 920 stores in the United States, Canada and Puerto Rico are slated to be closed, with 200 closures planned for this year and 100 for 2021. The Children's Place has closed a total of 275 stores since announcing its store optimization plan in 2013. In the first quarter ended May 2, the company reported a loss of $114.8 million after all stores closed March 18 in response to the COVID-19 pandemic. Net sales fell 38.1 percent to $225.2 million.
“We're significantly accelerating our fleet optimization initiative and focusing our resources on accelerating our digital sales, both key elements of our long-standing transformation strategy,” said Jane Elfers, president and CEO, in a statement. “At the same time, we're addressing the near-term priorities necessary to preserve our financial flexibility.”
Total Retail's Take: Despite the headline, it's not all bad news for The Children's Place. Elfers noted that online demand for the company’s “essential children’s clothing” is up 300 percent for the quarter-to-date and consolidated sales are up “low double-digits.” Furthermore, the company's digital investments have allowed it to "operate at a high level during the current crisis, with the ability to fulfill our outsized online demand through our advanced omnichannel capabilities," Elfers said. "We believe that our strong digital foundation, coupled with the rapidly changing shopping patterns of our consumer, partly due to the COVID-19 pandemic, our strong value proposition, and our core, digital-savvy millennial customer, will result in the continued acceleration of our digital revenue.” Like many other traditional brick-and-mortar retailers, The Children's Place is seizing the opportunity of more consumers shopping online to build out its e-commerce business, sometimes at the expense of its store business. Both channels working in harmony will be key to retail's successful rebound from what has been a difficult first half of the year.