THE CHILDREN’S PLACE EXTENDS TEMPORARY STORE CLOSURES AND PROVIDES AN UPDATE RELATED TO THE COVID-19 PANDEMIC
Based on direction from federal, state and local government and health officials, and to ensure the safety and well-being of our associates and customers, the Company has taken the following actions:
- Suspended all store operations in
the United Statesand Canadabeginning March 18, 2020:
- Until further notice from federal, state and local government and health officials, all of our stores remain closed. The Company is not able to predict the timing of store re-openings at this time.
- Store sales were planned to represent approximately 65% of Q1 fiscal 2020 revenue with a significant portion of sales planned for the months of March and April.
- Our digital sales continue to accelerate with quarter-to-date demand up double digits versus last year. We have implemented strict safety protocols and additional compensation incentives at our distribution centers, allowing the Company to continue to service its customers through its e-commerce sites at www.childrensplace.com and www.gymboree.com.
Actions Taken in Response to COVID-19
The Children’s Place is taking the following actions to provide additional financial flexibility:
- 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 millionof liquidity;
- Evaluating its options on approximately 600 store lease events occurring over the next twelve months; and
- Temporarily suspended the Company’s capital return program, inclusive of share repurchases and dividends. The Company is committed to its capital return program over the longer term and will re-evaluate when appropriate.
- Effective April 1, 2020:
Jane Elfers, President and Chief Executive Officer, will forgo 100% of her salary until further notice;
- The senior leadership team will take a temporary 25% reduction in salary until further notice; and
- The independent Directors of the Board have unanimously approved to forgo their cash compensation until further notice.
April 5, 2020:
U.S.and Canadian field management and stores associates will be temporarily furloughed until they can safely return to their positions;
- The Company will institute a combination of temporary furloughs and pay reductions for the majority of its corporate staff; and
- The Company will continue to provide health benefits to furloughed associates and those impacted may benefit from the recently passed CARES Act legislation.
The Company believes these actions, coupled with the actions announced on
About The Children’s Place
The Children’s Place is the largest pure-play children’s specialty apparel retailer in
Forward Looking Statements
This press release contains or may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to the Company’s strategic initiatives and adjusted net income per diluted share. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “project,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently. These forward-looking statements are based upon the Company's current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results and performance to differ materially. Some of these risks and uncertainties are described in the Company's filings with the
Source: The Children's Place, Inc.