Children’s Place ‘evaluating options’ on 600 store leases; CEO forgoing pay
The Children's Place Inc. is the latest retailer to furlough employees and take other measures to boost financial flexibility as it extends store closures indefinitely amid the COVID-19 pandemic.
The children’s apparel retailer will temporarily furlough all U.S. and Canada field managers and store employees starting April 5 and lasting "until they can safely return to their positions." The company will continue to provide health benefits to the furloughed associates.
Children’s Place is also instituting a combination of temporary furloughs and pay reductions for the majority of its corporate staff, with the senior leadership team taking a temporary 25% reduction in salary until further notice. CEO and president Jane Elfers will forgo 100% of her salary for the same.
In other actions to provide additional financial flexibility, The Children’s Place said it is evaluating its options on approximately 600 store lease events occurring during the next 12 months. It also is:
• Executing a substantial reduction and/or deferral of expenses and capital expenditures, including an ongoing reduction in forward inventory receipts;
• Collaborated with vendor partners to extend payment terms;
• Finalizing the execution of the accordion feature on its revolving credit facility, which will provide an additional $50 million of liquidity; and
• Temporarily suspended the company’s capital return program, inclusive of share repurchases and dividends.
The retailer noted that store sales were expected to represent approximately 65% of its first-quarter revenue with a significant portion of sales planned for the months of March and April. It said that digital sales continue to accelerate with quarter-to-date demand up double-digits versus last year
As of February 1, 2020, Children’s Place operated 924 stores in the United States, Canada and Puerto Rico, and had 266 international points of distribution open and operated by its eight franchise partners in 19 countries.