Regardless of the loss of profits associated with the ongoing coronavirus pandemic, the children’s place said store closures were speeding up. According to a recent income report, the Children’s Place will close 300 stores in the next 20 months. Accelerated closures of the kids’ clothing and accessories business because of revenue losses due to the continuing pandemic of Coronavirus.
The CFO and COO of The Children’s Place, Mike Scarpa says amid the pandemic, digital demand has been up 300%, as 95% of their stores remain closed. As of last week, 88% of store associates were brought back after being furloughed. The rest of associates are expected to return by July 1. Net sales in the first quarter of 2020 were down over 38% compared to 2019.
Currently, The Children’s Place operates 920 locations with 62% of their locations in shopping malls. Of the 300 store closure expected, approximately 200 are expected to fall within fiscal year 2020, and an additional 100 stores in the fiscal year 2021. The Children’s Place President and CEO Jane Elfers says the company is now focusing on its digital investment.
“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,” Elfers said in a statement. Scarpa said that he expects nearly 100 stores to reopen following the pandemic, and says that the company plans to liquidate their inventories before the end of the second quarter’s closing.
The company has not yet announced the specific stores it intends to close. “The challenges that lie ahead are many, and visibility is limited, but we are moving forward with urgency and focus, guided by the strategic pillars of our long-standing transformation strategy,” Elfers said.