Children’s Place increases store closures
The Children’s Place Inc. on Thursday accelerated its store closing plans to 200 stores through 2017 (including 76 stores closed in 2013 and 2014), up from its previous announced target of 125 stores through 2016. The company also issued a weak outlook.
The developments come a day after two Children’s Place shareholders — Barington Capital Group L.P. and Macellum Advisors G.P. L.L.C. — sent a letter to the chain requesting that it explore its options, including a possible sale. In the letter, the investors said they believe the company's shares trade at a modest valuation due to investors' concern over deteriorating operating performance since 2010 under the leadership of CEO Jane
Barington and Macellum said there are “likely a number of strategic and financial buyers who would be interested in acquiring The Children’s Place at a significant premium” due to its leadership position in the children’s apparel market.
Also on Thursday, Children’s Place reported better-than-expected net income of $17 million, up 8% from $15.7 million, amid lower impairment charges and an income tax provision. Net sales rose 2% to $479.2 million from $467.5 million. Same-store sales grew 3.7%.
“Our solid financial results were driven by an enhanced merchandise assortment that resonated with our customers, disciplined expense management and strong inventory controls,” said Jane Elfers, president and CEO The Children’s Place.
For the full fiscal year, Children’s Place net income climbed 7% to $56.9 million from $53 million. Net sales declined 0.3% to $1.76 billion. Same-store sales increased 0.4%.
The retailer ended the year with 1,097 stores and square footage of 5.129 million, a decrease of 1.5% compared to the prior year.
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