Children’s Place Is Shutting Hundreds of Stores by 2020
Childrens Place Inc, an American specialty retailer of children’s clothes and accessories, is shuttering nearly 300 stores across the country, and will be laying off hundreds of workers in the process.
CEO Jane Elfers confirmed in an interview with TheStreet that the company will be closing 300 of its brick-and-mortar locations by 2020. Elfers said that Chief Operating Officer Michael Scarpa has put a store closure initiative in place to tackle costs. The company’s move to close stores follows a major decline in store traffic.
Elfers took charge of the company in 2010, and has been making efforts to keep the company afloat in a fast-changing retail environment. Elfers said that when she joined the company, it was locked in to five- to seven-year leases. However, with the lease terms now approaching an end, the company is in a flexible position to shut down more stores. (Source: Ibid.)
The company has already closed 142 stores across North America since 2013.
Elfers attributes the decline in store traffic to the fact that bigger mall anchors are closing their own stores in major malls. Department store companies like Sears Holdings Corp, Macy’s Inc, and J C Penney Company Inc are closing hundreds of their brick-and-mortar locations this year, as online retailers like Amazon.com, Inc. become dominant over the retail industry.
Large chains like these have long served as anchors at major malls, driving foot traffic to stores in the rest of the mall. Consequently, once a mall anchor leaves, customer traffic to all stores within that mall drops.
As of January 2017, the company operated a total of 1,039 “The Children’s Place” stores across the U.S., Canada, and Puerto Rico. Childrens Place Inc operates as many as 644 of its stores within major malls.
Elfers said that the management team is focusing on a new business strategy. The company is starting to transfer its products to other retailers for sales, as well as tapping its digital channels. The company operates an online store and has been spending capital on improving the digital shopping experience. (Source: TheStreet, June 9, 2017, op cit.)
“The Children’s Place Is Closing 300 Stores by 2020,” TheStreet, June 9, 2017.
“Is Children’s Place the Place to Be?” TheStreet, March 10, 2017.
“Childrens Place Inc (PLCE.O),” Reuters, last accessed June 9, 2017.