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In spite of lingering apprehensions associated with the ongoing coronavirus crisis, the Retail - Apparel And Shoes industry has been steadily making its way out of the woods. The industry players have been focusing on deepening engagements with consumers, creating innovative and compelling products, and enhancing digital and data analytics capabilities. No wonder, The Children's Place, Inc. PLCE has been aggressively adopting strategies and making planned investments to cater to consumer demand and behavior.
Digital Strategy Helps Win New Customers
Children's Place has been making investments to upgrade its omni-channel capabilities as part of its digital transformation strategy. The company’s $50 million digital transformation investment to enhance omni-channel capabilities in order to meet online demand is reaping benefits. Markedly, the company has one of the highest digital penetrations in the industry. The company has also launched a completely redesigned responsive site and mobile app for The Children's Place and Gymboree brands.
Management on its last earnings call on Nov 19, 2020, highlighted that since the onset of the pandemic in March 2020, the company has seen its new digital customer count double year over year. Further, it has converted more than 800,000 of its store-only customers to omni-channel ones. Moreover, the company’s app downloads have risen more than 60%. We also note that the company’s digital penetration rose to 44% in third-quarter fiscal 2020.
Children's Place has rolled out "BOPIS" (Buy Online, Pick Up in Store), Save the Sale and Ship from Store. Further, it launched SMS texting capabilities. It has also rolled out “BOSS” (Buy Online, Ship to Store), response to which has been encouraging. With changing consumer shopping pattern, the company has been making efforts to lower dependency on brick-and-mortar platform and shift toward digitization. The company is aiming mall-based brick-and-mortar portfolio to account for less than 25% of revenues entering fiscal 2022.
Measures to Counter COVID-19 Impact
Apart from aforementioned digitization endeavors, Children's Place has been taking measures to address challenges tied to the COVID-19 pandemic. The company has been focusing on curtailing non-essential expenses, managing inventory, extending vendor payment terms, and analyzing capital expenditures.
Children's Place is leaving no stone unturned to expand customer base and improve its top-line performance. The company is accelerating fleet optimization initiative, directing resources toward digital platforms in order to better engage with customers, augmenting supply chain and concentrating on improving financial flexibility.
Markedly, shares of this Zacks Rank #2 (Buy) company have gained 68.5% over the past three-month time frame, courtesy of its robust business strategies. In the said period, the industry rallied 52.3%. Meanwhile, the Zacks Consensus Estimate for the company’s fiscal 2021 earnings has moved up 20.6% over the past 60 days.
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