The Children's Place initiates several measures to maintain financial stability

The Children’s Place has suspended all store operations in the United States and Canada beginning March 18, 2020. The company said in a statement that store sales were planned to represent approximately 65 percent of Q1 fiscal 2020 revenue with a significant portion of sales planned for the months of March and April, while its digital sales continue to accelerate with quarter-to-date demand up double digits versus last year. The Children’s Place added that it is taking several actions to provide additional financial flexibility.

Commenting on the development, Jane Elfers, the company’s President and Chief Executive Officer, said: “The Children’s Place continues to address the challenges associated with the ongoing Covid-19 pandemic. In this period of ongoing uncertainty, we are announcing the continued closure of all of our U.S. and Canadian stores until further notice. We are also taking difficult but proactive actions to bolster our financial flexibility and structurally position our company for the long term.”

The actions taken to save finances include executing a substantial reduction and/or deferral of expenses and capital expenditures, including an ongoing reduction in forward inventory receipts; collaboration 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 dollars of 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.

Effective April 1, 2020, the company further said, Jane Elfers will forgo 100 percent of her salary until further notice; the senior leadership team will take a temporary 25 percent reduction in salary and the independent directors of the board have approved to forgo their cash compensation. Effective April 5, 2020, all U.S. and Canadian field management and stores associates will be temporarily furloughed and the company will institute a combination of temporary furloughs and pay reductions for the majority of its corporate staff.

Picture:Facebook/The Children's Place