Store Closures 2019: Children’s Place To Close 40 To 45 Stores By Year-End

After purchasing the rights to Gymboree and Crazy 8 for $75 million back in March, Children’s Place (PLCE) said it plans to close 40 to 45 stores while it opens another 25 locations. The announcement from the retailer came during its first-quarter earnings call on Wednesday.

Children’s Place said it has developed a multiyear strategy to close 300 stores by 2020. Part of these closures include the 40 to 45 stores it intends to shutter by year end. The company’s 25 new stores will have 10 locations open by 2019.

“As a result of Gymboree’s bankruptcy, we plan to open 25 stores in highly productive centers over the next two years, where the Children's Place does not have a presence,” Mike Scarpa, Children’s Place company’s chief financial officer and chief operating officer said.

The company also has plans in place to reintroduce the Gymboree brand by early 2020 both online and in a “carefully selected group of 200-plus” stores locations, according to Jane Elfers, president and CEO at Children’s Place.

Currently, Children’s Place has 971 stores located throughout the U.S., Canada, and Puerto Rico. By 2013, the company had closed 213 locations, Scarpa said. In the first quarter of 2019, Children’s Place opened one store and closed two, decreasing its store footprint by 3.2 percent to 4.5 million square feet.

First quarter results for the company included a net sales decrease of 5.5 percent to $412.4 million from the $436.3 million of first quarter 2018. The company had a net income of $4.5 million in Q1 with an adjusted net income of $5.8 million.

“Our Q1 results significantly exceeded our expectations despite our 70% store overlap with the approximately 800 Gymboree and Crazy 8 liquidations that occurred in Q1 and the headwind of a later Easter,” Elfers said.

“Our sales began to accelerate in mid-March and continued to strengthen through the end of the quarter, resulting in positive comparable retail sales in excess of 20% for the month of April. Our product clearly resonated with our customers and our inventory is well positioned entering Q2.”

Shares of Children’s Place stock were up 2.86 percent as of 11:25 a.m. ET on Friday.