Facebook Twitter LinkedIn Google Plus RSS

Children's Place says it will close 100 stores by 2016

By ,

The Children's Place, a kids' clothing company based in Secaucus, may close nearly 200 stores in the next few years, executives announced during an earnings call this morning.

By 2016, 100 underperforming locations — roughly 9 percent of the company's 1,116 total stores — will be closed, with most of those in the United States. Though company executives did not offer specific cities or states, they did indicate most of the closures will involve oversized stores and locations situated in lifestyle malls.

The retailer also put 70 stores on the chopping block. If sales at those stores do not improve, they will be shut down, too, the company said.

The decision comes on the heels of a stronger-than-expected second quarter for The Children's Place, said Jane Elfers, the company's president and chief executive officer. Net sales rose 6 percent during that time, to $382.4 million, compared to $360.8 million in the second quarter of last year.

"We delivered a solid second quarter and are raising our 2013 forecast to reflect these strong earnings results," Elfers said in a statement. "We are encouraged by the solid start to the back-to-school season."

The company's e-commerce section has continued to post double-digit gains quarter over quarter, Elfers said, with a 24 percent gain in the second quarter of 2013.

Mike Scarpa, executive vice president and chief financial officer at The Children's Place, said the company is counting on its strong Web sales to cover some revenue lost from the store closures.

Although those locations were barely breaking even, Scarpa said they generated about $103 million in annual sales in 2012.

In addition, the retailer has not ruled out opening new locations as the existing ones close, though it is looking mostly for smaller locations and areas that will allow it to better serve the Hispanic market, Scarpa said.

Overseas expansion also is a key component of the company's growth strategy, Scarpa said. The Children's Place is on track to open about 40 stores in the Middle East by the end of this year, and will turn its eye to Israel in 2014.

The company's solid earnings report comes a few weeks after the retailer found itself in the headlines over a graphic T-shirt it sold that implied girls can't do well at math. That started a social media firestorm which forced the company to pull the product from its shelves and issue an apology.

Reporter Mary Johnson is @mjohns422 on Twitter.

Also Popular on NJBIZ

Write to the Editorial Department at editorial@njbiz.com

Leave a Comment


Please note: All comments will be reviewed and may take up to 24 hours to appear on the site.

Post Comment
View Comment Policy