Children’s clothing company The Children’s Place announced it will close 300 stores as a result of changes in consumer needs.
In the company’s quarterly financial report, The Children’s Place announced operating losses of $173.1 million in the three months that ended on May 2. Net sales were down 38% to $255.2 million in the same period compared to $412.4 million in the same quarter of 2019. The company reported that they could trace most of those losses to having to maintain operating costs during the forced closures due to the pandemic.
The Children’s Place temporarily shuttered all of its 920 retail locations in the U.S. and Canada on March 18 as a result of the coronavirus. Those stores remained closed until May 19, when The Children’s Place began reopening locations in 10 states.
As of June 8, just 61 stores are open across the U.S. and Canada. While more stores will open as state and local government health guidelines allow it, the company acknowledged in its quarterly report that the financial strain will mean a number of locations will permanently close. Specific locations have not been announced, yet, but it looks like mall locations are on the target list, according to company president and CEO Jane Elfers.
“We are now targeting to close an additional 300 stores by the end of fiscal 2021, with 200 closures planned for this year, and 100 closures planned for 2021. ,” Elfers said during the recent investor’s conference call. “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 revenue entering fiscal 2022.”Toronto, Ontario, Canada-January 7, 2020: Sign of a Children’s Place store in a shopping mall. Editorial photo illustration.
While The Children’s Place may be closing store locations, the company is looking to push forward by taking advantage of a surge in online shopping. In April 2020, online shopping demand rose 75%, in May 2020 it rose 359%, and already in June, digital sales are up 137%.
The Children’s Place, which also recently relaunched the popular Gymboree brand, began shifting its focus to online sales before the COVID-19 crisis.
“A decade-long strategic focus that has resulted in optimum flexibility in our lease terms, enabling us to significantly accelerate stores’ closures without financial penalty,” Elfers told investors.
Prior to the COVID-19 shutdown, the company already closed 275 stores in its effort to streamline its business practice. The Children’s Place and Gymboree brands also recently launched a new website and mobile app design as it looks to strengthen its place in online retail. Customers can visit them to get the latest updates on store location operating hours and if their local store will be affected by upcoming closures.