Children’s Place Extends Store Closures, Suspends Dividends to Cope With Virus Pandemic
The Children’s Place Inc (PLCE) said its stores across the U.S. and Canada will remain closed as the retailer is implementing financial measures to help cope with the impact of the coronavirus outbreak.
The children’s apparel retailer, which shut down all of its shops in the U.S. and Canada on March 18, said store sales were expected to account for 65% of first-quarter revenue this year with a significant portion coming from March and April sales. Digital sales continued to accelerate with quarter-to-date demand up double digits versus last year, the company said.
In response to the coronavirus impact, the company said it will withdraw its capital return program, reduce capital spending, extend vendor payment terms, and evaluate options on its 600 store leases in the next 12 months. In addition, the retailer said it is expecting to receive $50 million from a revolving credit line.
Overall Wall Street analysts have a Moderate Buy consensus rating on the company’s stock based on 2 Buys and 5 Holds. The $34.86 average price target forecasts a 78% potential upside in the shares in the coming 12 months. (See Children’s Place stock analysis on TipRanks)
President and Chief Executive Officer Jane Elfers, will forgo 100% of her salary and senior executives will take a temporary 25% reduction in salary from April 1, the company announced. Independent board directors agreed to forgo their cash compensation.
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