The Children’s Place Inc. is set to shutter 300 stores for good.
During its first-quarter earnings call, the company announced plans to permanently close many of its mall-based outposts over the next 20 months. About 200 locations are scheduled to shut down by the end of the fiscal year, and another 100 units are anticipated to shutter in the 2021 fiscal year.
The specialty retail chain — which currently has about 920 stores, with 62% of its fleet located in malls — expects to have a total of 625 outposts by next year’s end. (The retailer’s mall-based portfolio will account for less than 25% of revenues at the end of the 2021 fiscal year, the company said.)
As a result of government-mandated lockdowns, many of The Children’s Place units had been closed to the public since mid-May. According to the company, 95% of its stores are still shut down; however, the retailer plans to reopen about 350 outposts on June 16 and intends to have all units back in business by July 1.
Liquidation sales at about 50 locations are expected to take place in the next six weeks. “We expect that a good portion of them will open and liquidate and then will close, depending on the inventories that are left in the store,” CFO and COO Mike Scarpa said in the conference call.
The closures, according to the company, come as e-commerce demand at The Children’s Place has accelerated: The company — which three years ago announced that it would invest $50 million toward its digital transformation — noted that its online business has surged 300% in the quarter-to-date. Consolidated sales, however, are running in low double digits.
“We anticipate that the lingering impact of COVID-19 will continue to accelerate the shift to digital, putting enormous pressure on the already-stressed brick and mortar channel, resulting in accelerated store closures,” president and CEO Jane Elfers said.
For the three-month period ended May 2, The Children’s Place posted an adjusted loss of $1.96 per share. Sales declined more than 38% to $255 million, which the retailer attributed to temporary store closures as a result of the current health crisis.